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Conference  on 


Federal  Regulation  of 
Railways 


under  the  auspices  of 


The  Massachusetts  State  Board  of  Trade 


held  at 


Springfield,  Mass. 
December  28,  1916 


LIBRARY  OF  C0N6RESS  CARD  A17-418 


Including  Resolutions  Adopted  by  Massachusetts  State  Board  of 
Trade,  and  addresses  by  Mr.  Frank  W.  Whitcher,  Governor  Samuel 
W.  McGall,  Mayor  Frank  E.  Stacy,  The  Hon.  Henry  G.  Wells,  Dr. 
Philip  S.  Moxom,  Dr.  Victor  S.  Clark,  Mr.  John  F.  Tobin,  Mr.  Fred- 
erick P.  Fish,  Mr.  Howard  Elliott,  and  Mr.  George  L.  Graham. 


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MASS    MEETING    OF    MASSACHUSETTS    BUSINESS 

MEN,     HELD     AT     THE     SPRINGFIELD,     MASS., 

AUDITORIUM,  ON  DECEMBER  28,  1916,  FOR 

DISCUSSION  OF  THE  TRANSPORTATION 

PROBLEM.       AUSPICES      OF     THE 

MASSACHUSETTS  STATE  BOARD 

OF  TRADE 

2.30  P.  M.  SESSION 

President  Frank  W.  Whitcher:  Gentlemen,  in  view  of  the 
vital  importance  of  the  railroad  situation  with  which  our 
country  is  presented,  a  meeting  of  the  National  Coun- 
cillors of  the  Chamber  of  Commerce  of  the  United  States 
was  called,  to  be  held  on  the  17th  and  18th  of  November. 
That  meeting  was  called  to  discuss  the  railroad  contro- 
versy, with  a  view  to  making  recommendations  to  Con- 
gress regarding  measures  of  relief  for  the  benefit  of  the 
public.  There  were  present  at  that  meeting  representa- 
tives of  over  four  hundred  national  trade  and  commerce 
organizations.  Speakers  were  present  who  were  ac- 
quainted with  every  phase  of  the  railroad  situation. 
Their  words  were  followed  with  the  greatest  attention, 
and  they  were  intensely  interesting  and  instructive. 
Everybody  there  felt  that  never  again  should  the  possi- 
bility arise  whereby  the  wheels  of  transportation  could 
be  stopped,  as  it  appeared  likely  last  August.  It  seemed 
to  us  that  should  the  wheels  of  transportation  be  stopped 
there  would  result  not  only  a  national  crisis,  but  it  would 
also  produce  a  national  calamity ;  for  if  the  food  products 
of  the  country  were  cut  off,  even  temporarily,  great  suf- 
fering would  ensue.  If  the  raw  materials  could  not  reach 
the  mills  they  would  be  obliged  to  shut  down  and  labor 
would  suffer.    Such  a  crisis  could  not  be  permitted. 

The  railroads  are  like  the  great  trees.  As  the  country 
has  grown  and  the  railroads  have  reached  out  over  the 

3 

35864fci 


o^**^: 


country  the  cities  and  towns  have  grown  along  with  them, 
and  as  the  leaves  of  the  tree  would  suffer  if  the  sap  could 
not  reach  them,  so  would  the  cities  and  towns  suffer  if 
transportation  could  not  carry  to  those  cities  and  towns 
the  food  and  products  necessary  for  their  existence. 

When  the  councillor  of  the  Massachusetts  State  Board 
of  Trade,  ex-President  John  H.  Corcoran,  rendered  his 
report  to  our  Board  the  gravity  of  the  situation  was  real- 
ized, and  it  was  felt  that  the  Massachusetts  State  Board 
of  Trade  should  take  some  positive  action.  In  discussing 
what  means  should  be  taken,  it  appeared  that  a  mass 
meeting  would  be  the  better  way  to  express  the  business 
sentiment  of  the  country.  A  committee  was  appointed 
with  full  powers.  We  wired  the  Chamber  of  Commerce 
of  the  United  States  that  such  a  meeting  was  contem- 
plated. Back  came  the  reply:  ^^By  all  means  hold  the 
meeting,  and  hold  it  immediately  if  possible."  The  com- 
mittee came  to  Springfield.  We  stated  the  case  to  his 
Honor,  Mayor  Stacy,  and  to  the  secretary  of  the  Spring- 
field Board  of  Trade,  Mr.  Foss.  And  they  said:  **Have 
the  meeting  surely,  and  we  want  you  to  have  it  in  Spring- 
field. We  have  here  an  auditorium  which  will  care  for 
any  number  of  people.  We  took  care  of  the  twenty  thou- 
sand people  at  the  National  Dairy  Show  this  fall,  and  we 
can  take  care  of  every  gathering  that  you  can  bring  here. 
We  have  splendid  hotel  accommodations.  There  is  no 
reason  why  you  should  not  come  to  Springfield." 

There  was  another  reason  in  the  minds  of  the  commit- 
tee why  we  were  glad  to  welcome  the  invitation  to  Spring- 
field, and  that  is  that  the  people  from  the  eastern  part  of 
Massachusetts  might  be  brought  up  here  and  meet  the 
gentlemen  of  this  city  who  have  such  a  -splendid  public 
spirit  and  who  are  doing  so  much  for  Hampden  County 
and  for  Massachusetts.  This  city  already  has  received 
the  honor  of  being  the  first  district  to  receive  the  farm 
loan  arrangement  and  bank,  which  our  Government  has 
just  about  undertaken.  That  alone,  gentlemen,  will  do 
much  for  Western  Massachusetts.  In  fact,  for  the  whole 
of  Massachusetts  and  New  England. 


The  public  spirit,  gentlemen,  in  this  section  of  the  State 
seems  to  permeate  the  very  atmosphere,  and  your  com-- 
mittee  felt  that  to  bring  you  here  to  rub  elbows  with  the 
people  here  you  would  imbibe  some  of  the  public  spirit 
which  you  would  carry  back  from  this  grand  old  State 
and  help  to  develop  amongst  the  people  everywhere  the 
same  public  spirit,  if  possible,  which  exists  in  this  and  the 
surrounding  sections.    (Applause.) 

And,  gentlemen,  we  have  been  sending  invitations 
broadcast  over  the  State.  You  are  here  in  response  to 
those  invitations,  and  it  is  certainly  a  very  great  pleasure 
to  the  members  of  the  Massachusetts  State  Board  of 
Trade  to  see  such  a  representative  body  of  gentlemen  who 
have  been  willing  to  give  up  their  time  to  come  here  at 
such  an  inopportune  season  of  the  year  to  discuss  this 
very  necessary  subject. 

There  are  members  here  from  Boards  of  Trade  and 
Chambers  of  Commerce  all  over  the  State.  There  are 
members  from  the  Boston  Chamber  of  Commerce.  Al- 
though the  by-laws  of  the  Boston  Chamber  expressly  pro- 
hibit being  bound  by  any  such  acts  as  this,  they  have 
already  had  referendums  on  two  subjects,  and  it  is  un- 
likely that  any  action  will  be  taken  at  this  session  which 
cannot  be  fully  endorsed.  Secretary  Eeed  said:  **I  fully 
intended  to  come,  but  unfortunately  business  matters 
have  come  up  which  prevent  me.  But  I  wish  you  to  pre- 
sent my  hearty  wishes  for  the  success  of  the  meeting,  and 
tell  your  members  that  I  am  in  full  accord  with  this  gath- 
ering. ' ' 

This  meeting  that  is  called  to-day  is  not  to  antagonize 
labor;  not  to  favor  the  railroads,  but  to  ascertain  facts 
and  to  act  for  the  good  of  all  of  the  people  of  Massachu 
setts  after  receiving  those  facts. 

When  it  was  thought  advisable — in  fact,  when  we  hoped 
that  we  might  have  the  presence  of  His  Excellency  the 
Governor  here — the  President  of  your  Board,  Secretary 
Fiel  and  his  Honor  Mayor  Stacy  went  to  the  State  House 
and  asked  the  Governor  if  he  would  come  to  Springfield 
to  attend  this  meeting.     His  answer  was  immediately 


**Yes.''  When  we  asked  Mm  if  he  would  preside  at  the 
afternoon  meeting,  again  came  his  answer  with  no  hesita- 
tion, ^  *  Yes. "  And,  gentlemen,  in  spite  of  the  fact  that  his 
time  is  limited  in  which  to  write  his  inaugural  address — 
for,  as  a  matter  of  fact,  he  brought  his  stenographer  on 
the  train  with  him,  and  has  been  working  all  the  way  up 
to  Springfield — he  has  kept  his  promise  and  he  is  here, 
gentlemen ;  another  example  of  the  way — one  of  the  many 
ways — in  which  he  is  serving  this  grand  old  State  after 
an  experience  of  twenty  years  at  Washington,  and  after 
meeting  with  the  governors  of  many  other  States  and 
bringing  to  us  as  he  has  this  afternoon  his  broad  expe- 
rience in  governmental  affairs. 

Gentlemen,  he  needs  no  introduction  to  a  body  of  busi- 
ness men  of  Massachusetts,  and  I  have  the  honor  of 
resigning  the  chair  to  His  Excellency  Governor  Samuel 
W.  McCall.    (Applause.) 

Governor  McCall:  Mr.  Chairman  and  Gentlemen:  The 
name  of  the  good  causes  that  have  friends  in  Massachu- 
setts is  legion.  I  did  not  experience  until  a  year  ago  in 
how  many  great  social  activities  our  people  have  engaged, 
and  it  is  impossible  for  one  governor — I  think  it  would 
be  impossible  if  the  State  had  two  governors — to  be 
present  upon  the  occasions  that  are  really  important  and 
where  some  good  cause  is  represented.  But  when  your 
President  and  the  Mayor  of  Springfield  called  upon  me 
and  told  me  the  object  of  your  coming  together  here 
to-day  and  asked  me  if  I  would  be  present  and  show  my 
interest  in  it  by  presiding,  I  said  without  hesitation  that 
I  would  be  glad  to  come,  although  it  is  with  a  good  deal 
of  inconvenience  that  I  am  here  to-day. 

But  I  am  here  because  I  believe  that  there  is  no  public 
question  that  more  profoundly  interests  the  public  of 
Massachusetts  than  the  question  of  transportation.  Lord 
Bacon  spoke  of  the  most  interesting  things  in  civilization, 
and  he  mentioned  as  one  of  the  most  important  the  mov- 
ing of  men  and  of  goods  from  one  place  to  another  place. 
That  represented  the  idea  of  commerce.    But  to-day  com- 


merce  from  having  been  a  mere  occupation  has  become 
something  that  is  necessary  to  our  existence.  One  or 
two  generations  ago  our  communities  were  self -centered 
and  independent.  They  raised  the  food  that  they  ate; 
they  raised  their  wheat  and  had  their  mill  to  make  it 
into  flour.  They  raised  their  beef ;  they  raised  the  wool 
which  was  spun  in  the  households,  and  they  were  entirely 
independent  and  could  live  among  themselves.  But  on 
account  of  the  introduction  of  modern  systems  of  trans- 
portation we  have  emerged  from  that  condition  of  affairs, 
and  no  community  in  New  England  now — certainly  the 
Commonwealth  as  a  whole — cannot  live  by  itself  alone. 
We  have  to  bring  the  flour  out  of  which  our  bread  is  made 
from  Minneapolis ;  our  meat  comes  from  Chicago,  where 
it  is  manufactured  from  cattle  from  Texas.  The  wool 
comes  from  Utah  and  the  Par  Western  States ;  the  cotton 
comes  from  the  South,  and  we  are  absolutely  dependent 
for  our  living  upon  what  we  get  from  distant  places.  And 
so  transportation  has  become  a  matter  of  great  necessity. 
Now  Massachusetts  has  the  sea,  and'  in  the  old  times 
before  the  internal  commerce  of  the  country  was  devel-^ 
oped  she  was  almost  supreme  among  the  colonies  and  in 
the  early  days  among  the  States  of  the  Union,  because  she 
had  a  hardy  breed  of  sailors  and  the  ships  from  the  ports 
of  the  Commonwealth  went  over  the  whole  globe.  Now 
our  commerce  has  gone  by.  It  is  unnecessary  and  it  is 
hardly  pertinent  here  to-day  to  discuss  why  it  has  gone  by, 
but  our  commerce  on  the  sea  has  practically  become  obso- 
lete, and  I  trust  that  will  not  continue  long,  as  applied  to 
Massachusetts,  for  from  it  we  had  such  great  advantages. 
On  account  of  our  dependence  upon  this  transportation, 
having  our  source  of  supply  in  the  distance  from  which 
we  draw  our  raw  materials,  and  then  after  that  manu- 
facturing them,  having  our  markets  where  we  sell  those 
manufactured  products  in  the  distance,  Massachusetts  is 
at  a  great  disadvantage  with  the  other  States  of  the 
Union.  From  a  position  of  advantage,  we  are  to-day, 
from  our  location  in  one  corner  of  the  country,  at  a  great 
disadvantage,  because  we  are  farther  than  most  of  the 


producing  centers  from  the  source  of  supply  of  raw 
material,  and  we  are  also  farther  from  the  markets  that 
buy  the  finished  product.  And  so  it  is  a  matter  of  great 
importance  that  we  should  have  discussed — that  the  busi- 
ness men  of  Massachusetts  should  have  discussed  before 
them,  for  they  in  the  last  analysis  are  responsible  for 
public  policies  and  for  legislation — that  they  should  have 
this  important  question  discussed  before  them. 

Now  this  is  not  a  meeting,  as  I  understand  it,  that  is 
called  in  favor  of  any  side  of  the  question,  except  simply 
the  public  side.  I  represent  the  public.  We  want  to  know 
what  can  best  be  done  to  serve  the  public  and  to  meet  the 
great  ends  for  which  these  carriers  were  established. 
Nobody  is  here  in  hostility  to  the  railroads.  Nobody  is 
here  in  hostility  to  the  men  who  operate  them,  but  we  are 
here  for  a  common  purpose — to  have  the  subject  looked 
at  from  different  viewpoints.  And  so  I  say  that  I  felt 
that  the  great  importance  of  this  question  required  here 
to-day  the  presence  of  the  chief  executive  of  the  Common- 
wealth. Not  me,  but  simply  because  of  the  office  that  I 
happen  at  the  moment  to  hold. 

I  think  that  Springfield  is  a  good  place  in  which  to  hold 
this  meeting.  I  was  here  last  February  when  they  were 
having  the  preliminary  meeting  in  order  to  get  here  the 
National  Dairy  exhibition — one  of  the  greatest  exhibi- 
tions of  livestock  that  is  held,  the  very  greatest  that  is 
held  in  the  United  States,  and  I  believe  probably  the 
greatest  ever  held  in  the  world.  I  came  to  a  meeting 
where  there  were  men  from  different  parts  of  New 
England,  and  it  was  necessary  to  raise  a  large  sum  of 
money  in  order  to  have  this  exhibition — I  think  something 
like  three-quarters  of  a  million  dollars.  I  do  not  know 
whether  Mayor  Stacy  put  that  money  up,  but  I  know  that 
in  an  incredibly  short  time  the  public- spirited  men,  and 
chiefly  the  men  who  live  in  Springfield  and  this  vicinity, 
raised  that  great  sum  of  money,  and  as  a  result  Spring- 
field last  fall  had  as  great  a  dairy  show  as  was  ever  held 
on  this  continent. 

And  then  to  aid  this  subject,  this  discussion,  it  was 

8 


arranged  by  the  president  of  the  Massachusetts  Board  of 
Trade,  that  this  discussion  should  take  place  here  at 
Springfield,  and  I  am  glad  to  be  here  in  a  town  that  is 
establishing  itself  as  one  of  the  greatest  civic  centers  in 
the  Commonwealth  and  in  the  country.  (Applause.) 
That  shows  a  willingness  to  promote  great  objects  like 
these  that  are  fundamental  in  the  prosperity  of  the  Com- 
monwealth. 

There  can  be  no  better  subject  discussed  for  the  farmers 
of  Massachusetts,  no  better  subject  illustrated  than  the 
exhibition  of  such  livestock  as  they  had  here  last  October. 
And,  as  I  said,  there  can  be  no  discussion  of  a  more  im- 
portant question  for  the  Commonwealth  at  large  than 
the  discussion  of  this  subject  of  transportation,  and  it 
now  becomes  my  pleasure,  gentlemen,  as  your  presiding 
officer  to  introduce  to  you  the  Mayor  of  this  beautiful  city 
of  Springfield,  who  will  extend  a  few  words  of  welcome. 

Mayor  Frank  E.  Stacy :  Your  Excellency,  Mr.  President, 
members  of  the  Massachusetts  Board  of  Trade  and 
friends :  The  honor  that  is  conferred  upon  me  this  after- 
noon in  coming  here  and  extending  to  you  the  greetings 
of  the  city  of  Springfield  is  a  great  honor  and  a  pleasant 
duty,  and  I  am  very  grateful.  Of  course,  it  is  always  a 
pleasure  for  me  to  welcome  and  to  bring  to  our  governor 
the  greetings  of  the  city.    We  love  him  up  here. 

We  are  having  Shakespeare  in  this  city  this  week — Mr. 
Mantell  is  giving  us  a  week  of  Shakespeare — and  I  hap- 
pened to  think  that  I  believe  it  was  that  gentleman  who 
said  *^ Brevity  is  the  soul  of  wit.''  So  it  is  up  to  me  to 
be  brief.  We  had  Othello  last  night,  and  I  thought  of  a 
little  story  that  was  told  of  one  of  the  barnstorming  com- 
panies who  took  Shakespeare's  play  on  the  road  down 
into  the  Southern  cities.  They  were  playing  Othello  and 
they  were  before  one  gathering.  There  is  one  place  where 
the  actor  says:  ^^Desdemona!  Desdemona!  give  me  back 
that  handkerchief!"  The  actor  said  his  line  and  he 
couldn't  think  of  the  rest  of  his  speech,  so  he  repeated: 
'^Desmona!  Desmona!  give  me  back  de  handkerchief!" 


But  he  could  npt  think  of  any  of  the  lines  that  followed, 
and  he  began  again :  * '  Desmona !  Desmona  I  give  me  back 
de  handkerchief !  * '  Some  voice  up  in  the  gallery  shouted, 
**0h!  wipe  your  nose  on  your  sleeve  and  let  the  play  ge 
on.''    (Laughter.) 

Now,  gentlemen,  in  view  of  the  remarks  that  have  been 
made,  and  of  the  program  which  you  have  here,  I  know 
you  feel  the  same  way,  and  I  would  be  ungrateful  if  I  had 
anything  to  offer  relative  to  Springfield.  We  are  glad  you 
are  here.  We  are  glad  you  have  chosen  this  place,  and  I 
want  to  thank  the  Governor  for  the  kind  words  he  has 
said  about  Springfield.  We  appreciate  them.  But 
Springfield  realizes  that  it  is  a  part  of  Massachusetts, 
and  just  one  portion,  and  we  are  trying  here  to  broaden 
ourselves,  and  if  in  broadening  ourselves  we  are  broaden- 
ing the  State  we  are  well  repaid. 

Gentlemen,  I  know  of  nothing  else  that  I  could  add.  We 
are  simply  here  in  this  line  this  afternoon.  We  had  the 
Dairy  Show.  We  are  out  for  other  organizations,  but  we 
are  glad  that  you  have  come  here  this  afternoon.  We  are 
heartily  in  sympathy  with  you,  and  are  glad  that  you  have 
come  here  to  see  what  we  are  doing. 

I  could  tell  you  of  many  efforts,  of  many  good  things, 
but  time  will  not  permit.  Gentlemen,  we  are  glad  you  are 
here,  and  in  behalf  of  Springfield  I  want  to  extend  to  you 
our  heartiest  greetings. 

President  Whitcher:  There  is  a  duty  to  be  performed, 
and  I  move  that  a  committee  on  resolutions,  to  prepare 
resolutions  for  consideration  of  this  conference,  be  ap- 
pointed. 

Chairman  McCall :  You  hear  the  motion. 

Mr.  John  H.  Corcoran:  I  would  suggest  that  the  com- 
mittee be  appointed  by  Mr.  Whitcher.  (Motion  seconded 
and  carried.) 

Mr.  Whitcher:  With  your  permission,  I  will  give  you 
the  names  of  the  Eesolutions  Committee : 

10 


John  H.  Corcoran,  Cambridge,  Chairman 
Hon.  Frank  E.  Stacy,  Springfield 
Frank  D.  Howard,  Chicopee 
F.  Alexander  Chandler,  Boston 
Everett  Sntcliffe,  Cambridge 
William  H.  Gleason,  Winchester 
George  C.  Morton,  Boston 
Joseph  Wing,  Brookline 
Thomas  P.  Anderson,  Boston 
Archie  J.  Osborne,  Holyoke 
George  F.  Willett,  Norwood 

Mayor  Stacy:  Before  the  President  takes  his  seat,  may  I 
make  the  motion  that  a  committee  of  six,  to  be  known  as 
a  Follow-np  Committee,  to  appear  before  the  Newlands 
Committee  if  necessary  in  support  of  the  resolutions  of 
this  conference,  be  appointed  by  the  Chair?  (Motion 
seconded  and  carried.) 

Mr.  Frank  D.  Howard:  I  move  a  committee  on  ere 
dentials  be  appointed. 

Chairman  McCall :  Mr.  Howard  moves  that  a  committee 
on  credentials  be  appointed.  Possibly  this  should  have 
been  done  by  the  primary  organization,  but  it  can  be  pro- 
ceeded with  now.  (Motion  seconded  and  carried.)  Shall 
this  committee  be  appointed  by  President  Whitcher? 

Mr.  Howard :  I  make  that  a  part  of  my  motion. 

President  Whitcher:  The  Follow-up  Committee,  which 
was  thought  advisable  because  of  the  possible  assistance 
they  could  render  by  going  to  Washington  and  appearing 
before  the  committee — it  was  thought  advisable  to  have 
that  committee,  and  I  would  appoint : 

The  Hon.  Frank  E.  Stacy,  Springfield 

Mr.  George  L.  Graham,  Boston 

Mr.  George  C.  Morton,  Boston 

Mr.  Frank  D.  Howard,  Chicopee 

Mr.  Archie  J.  Osborne,  Holyoke 

Mr.  Frank  W.  Whitcher,  Boston 

11 


Committee  on  Credentials: 

Mr.  Frank  D.  Howard,  Chicopee 
Mr.  George  L.  Avery,  Framingham 
Mr.  Chas.  H.  Stevens,  Arlington 

Chairman  McCall:  The  committees  will  retire,  as  re- 
quested. It  is  too  bad  we  should  have  such  a  large  com- 
mittee who  necessarily  have  to  leave  the  room  before 
hearing  the  next  and  most  interesting  speaker.  The  sub- 
ject is  *^The  Legislature,  the  Public  and  Transportation.*' 

I  would  not  want  you  to  infer  that  the  Legislature  is 
anything  distinct  from  the  public.  It  was  established  to 
represent  the  public,  and  I  believe  that  it  has,  during  the 
last  year  at  any  rate,  for  I  have  had  the  opportunity  not 
of  reading  of  what  they  did,  but  I  can  testify  as  a  witness 
to  what  they  did.  I  think  they  represented  the  public  very 
well,  and  I  present  to  you  to  speak  upon  that  subject  a 
gentleman  who  has  had  experience  in  both  houses  of  the 
Legislature,  and  who  has  presided  with  distinction  over 
the  Senate :  the  Honorable  Henry  G.  Wells  of  Haverhill, 
Massachusetts. 

The  Hon.  Henry  G.  Wells:  Your  Excellency,  the  Presi- 
dent, the  Mayor  and  friends:  As  was  suggested  by  His 
Excellency,  the  particular  topic  which  I  am  here  to  pre- 
sent to  you  deals  with  the  relationship  of  the  transporta- 
tion problem  to  the  public  through  the  Legislature. 

Transportation  is  the  movement  of  persons  and  things. 
A  discussion  of  the  transportation  problem  may  include, 
first,  the  system  itself.  This  means  in  the  first  instance 
purely  technical  problems  of  engineering,  construction, 
maintenance  and  operation  of  means  or  mechanism.  Our 
highly  developed  technical  schools  and  native  ingenuity 
have  placed  the  United  States  on  a  par  with  any  nation  in 
this  sphere  of  activity.  This,  however,  is  entirely  outside 
the  scope  of  this  paper. 

The  second  phase  of  the  transportation  system  may  be 
described  as  that  of  busiaess  methods  and  management. 
Here  the  United  States  has  not  always  been  as  successful, 

12 


depending  to  a  certain  extent  upon  experience  and  train- 
ing, rather  than  upon  scientific  preparation,  and  too  often 
furnishing  opportunity  to  thDse  ready  to  take  advantage 
of  it  to  serve  their  own  ends  rather  than  to  serve  the 
railroad  and  through  it  the  public.  Herein  is  one  field  for 
the  interest  of  the  public  through  its  Legislatures. 

Apart  from  the  system  itself  is  the  transportation 
service  itself  embracing  the  relationship  of  the  various 
parts  of  the  system  to  the  whole  and  the  relationship  of 
the  companies  and  inviduals  performing  the  service  to  the 
users  thereof.  Here  again  we  find  a  field  of  contact  be- 
tween the  common  carrier  and  the  public  through  the 
Legislature. 

We  find  in  a  study  of  this  relationship  that  one  must  be 
a  student  not  only  of  political  science,  but  also  of  eco- 
nomics. Li  the  old  days  civilization  was  confronted  with 
a  great  problem,  but  it  was  largely  of  two  factors — con- 
sumption and  production.  At  first  the  family,  then  the 
community  was  almost  self-sustaining,  with  a  proper 
balance  between  these  two  factors.  The  law  of  supply  and 
demand  was  a  vital  controlling  incident. 

To-day  exchange  and  distribution  are  factors  fully  as 
important.  The  economic  growth  of  the  nation  has  been 
fostered  by  these  transportation  systems,  and  in  turn  the 
prosperity  of  the  nation  is  dependent  upon  the  success  of 
these  systems.  The  law  of  supply  and  demand,  while 
still  a  vital  incident,  has  been  deeply  affected  by  this  addi- 
tional element.  Every  part  of  the  nation  is  dependent 
upon  some  other  part  of  the  nation,  and  the  price  of  a 
commodity  depends  not  alone  upon  the  relationship  of 
supply  and  demand,  but  also  upon  the  facility  with  which 
that  commodity  produced  in  abundance  in  one  part  may 
be  easily  distributed  to  all  parts.  Transportation  service 
is  thus  of  vital  importance  in  the  exchange  of  commodi- 
ties, but  also  it  fosters  in  this  way  the  growth  of  produc- 
tive effort.  More  land  is  utilized,  more  capital  is  put  to 
use,  more  chances  for  labor  are  available,  productive 
areas  are  not  only  extended,  but  there  has  been  specializa- 
tion of  effort  because  of  the  possibility  of  distribution. 

13 


This  important  phase  of  the  question  will  be  dealt  upon 
by  others,  namely,  metl^ods  by  which  this  distributive 
factor  of  our  transportation  system  can  be  improved,  not 
only  for  the  success  of  our  Massachusetts  industries,  but 
also  that  the  products  of  our  sister  States  necessary  for 
our  welfare  can  be  brought  to  us  without  delay  at  a  rea- 
sonable cost  and  with  some  degree  of  uniformity  of  deliv- 
ery. The  average  individual  is  often  more  concerned  over 
a  train  five  minutes  late  or  an  increase  of  two  cents  in 
fare  for  a  thirty-mile  ride  than  he  is  in  the  effect  of  the 
transportation  service  upon  the  cost  of  a  commodity — 
unless  he  has  to  pay  twelve  dollars  a  ton  for  coal. 

This  vital  dependence  of  the  social  organization  upon 
transportation  leads  us  to  a  consideration  of  the  relation- 
ship of  government,  State  and  Federal,  to  the  transporta- 
tion service  and  to  the  management  of  the  transportation 
system.  There  are  four  kinds  of  such  service  from  a 
political  science  standpoint.  There  is  the  government- 
owned  and  government-operated  road.  There  is  the  gov- 
ernment-owned and  privately  operated  road.  There  is 
the  privately  owned  and  government-operated  road  and 
there  is  the  privately  owned  and  privately  operated  road. 

It  is  not  within  our  province  to  discuss  the  relative 
merits  of  these  four  classes.  Our  problem  in  the  United 
States  is  largely  that  of  the  fourth  class  and  the  degree 
and  form  of  supervision  or  control  that  the  government 
should  exercise  over  it.  The  success  or  non-success  of 
that  control  will  ultimately  determine  whether  this  class 
will  in  time  pass  over  into  one  of  the  other  three  classes. 
Whether  owned,  operated  or  regulated,  transportation 
service  is  of  a  public  nature  and  has  so  been  determined 
by  the  courts. 

The  corporation,  that  is,  the  agency  through  which  the 
railroad  operates,  while  a  private  corporation,  differs 
from  the  ordinary  business  corporation  in  that  it  serves 
the  public.  On  the  other  hand,  it  is  not  a  public  corpora- 
tion in  the  sense  of  a  municipality.  Hence  there  is  the 
question  of  both  a  public  and  a  private  corporation  to  be 
considered.    It  is  easy  to  lay  down  a  general  rule  that 

14 


the  government,  through  its  legislative  body  or  some 
other  body  to  which  the  power  has  been  delegated,  shall 
only  regulate  and  supervise  those  functions  and  activities 
of  the  corporation  which  aifect  the  public  and  shall  not 
interfere  with  those  functions  and  activities  which  are 
strictly  private.  The  difficulty  is  to  determine  what  func- 
tions and  activities  are  strictly  private  and  what  affect 
the  public.  More  and  more  are  the  activities  of  the  rail- 
road corporation  of  every  sort  affecting  the  public,  and 
more  and  more  are  the  details  of  operation  and  manage- 
ment coming  under  the  supervision  of  the  government. 

The  government  in  the  first  instance  in  granting  the 
charter  of  organization  grants  certain  privileges,  such  as 
locations,  the  right  to  take  land  by  eminent  domain,  a  cer- 
tain monopoly  of  business;  hence  it  has  the  right  to 
oversee  the  organization  of  the  corporation.  Charters 
are  usually  granted  by  the  States,  and  at  first  were  with 
few  restrictions.  Abuses  crept  in,  and  now,  whether  by 
special  act  or  general  law,  there  are  very  strict  provi- 
sions. It  is  but  a  step  from  the  approval  of  the  original 
charter  to  the  regulation  of  the  issuance  of  capital  stock. 
Massachusetts  is  very  strict  upon  this  point.  This  State 
requires  that 

First:  The  amount  of  issue  and  purpose  for  which 
issued  shall  be  approved  by  the  Public  Service  Commis- 
sion. 

Second:  The  proceeds  of  sale  be  applied  to  specific 
purposes. 

Third :  No  shares  of  stock  to  be  issued  as  bonus  to  bond 
purchasers  or  below  par,  and  all  stock  to  be  paid  for  in 
cash. 

Fourth:  Price  above  par  to  be  approved  by  the  Com- 
mission. 

Fifth :  Bonds,  notes  and  other  evidences  of  indebted- 
ness not  to  be  issued  to  exceed  twice  amount  of  capital 
stock. 

Other  States  are  not  as  strict  in  their  control  of  capi- 
talization and  the  Federal  government  has  been  slow  to 
assume  any  responsibility  in  this  matter.    The  history  of 

15 


railroad  financing  in  the  United  States,  speculative  stock 
raids  and  poor,  even  fraudulent,  management  along  this 
line,  which  has  led  many  a  road  to  insolvency,  would  seem 
to  be  ample  reason  for  strict  supervision  of  the  capitali- 
zation of  roads,  even  though  average  United  States  capi- 
talization per  mile  is  about  one-quarter  that  of  the  United 
Kingdom.  The  basis  of  the  limitation  of  railroad  capital- 
ization is  still  unsettled,  there  being  strong  advocates  of 
the  theory  of  original  cost  as  a  basis,  that  of  earning 
capacity  or  the  theory  of  the  cost  of  reproduction.  A 
combination  of  the  latter  two  as  a  foundation  for  a  proper 
valuation  as  the  basis  for  capitalization  seems  to  be  the 
more  popular. 

Intercorporate  relations  seem  a  proper  subject  of  gov- 
ernmental review.  The  relationship  of  one  corporation 
to  another  can  very  well  have  a  vital  effect  upon  the  public 
either  in  the  manipulation  of  securities  causing  an  in- 
crease in  rates  or  in  the  service  rendered  by  the  trans- 
portation of  people  or  commodities.  To  this  end  financial 
reports  and  accounts  ought  to  be  subject  to  supervision, 
and  if  a  uniform  system  is  the  best  method  of  obtaining 
results  let  us  have  such  a  system. 

Various  functions  of  service,  such  as  train  schedules, 
safety  and  convenience  of  operation,  non-discrimination, 
all  vitally  affect  the  public  and  should  be  subject  to  gov- 
ernmental control. 

A  most  important  function  which  is  and  should  be  regu- 
lated is  that  of  rates.  The  States  to-day  have  power  to 
regulate  intrastate  rates  which  do  not  affect  interstate 
rates.  The  Federal  government  regulates  interstate  rates 
and  can  regulate  such  intrastate  rates  as  indirectly  affect 
the  interstate  rates.  For  years  efforts  have  been  made 
for  a  uniform  classification  of  rates.  If  such  a  thing  is  a 
practical  possibility  without  endangering  present  indus- 
tries or  upsetting  the  balance  of  locality  competition  then 
a  big  problem  wiU  be  solved  by  such  a  method. 

The  whole  problem  of  regulation,  and  rate  regulation 
particularly,  has  one  bugbear,  namely,  the  inevitable  con- 
flict between  different  States  and  between  States  and 

16 


the  Federal  government.  We  shall  all  be  glad  to  hear 
what  the  president  of  the  New  Haven  road  has  to  oifer  on 
that  subject.  Many  of  the  troubles  of  the  New  Haven 
have  been  due  to  the  fact  that  the  laws  and  regulations  of 
other  States  permitted  what  Massachusetts  did  not  per- 
mit. Most  railroads  have  often  been  embarrassed  by 
directly  conflicting  laws  and  regulations  of  the  Federal 
government  and  of  the  local  State  governments.  Uni- 
formity is  to  be  desired  even  though  Massachusetts  may 
have  to  surrender  some  of  its  functions  of  regulation  to 
the  Federal  government  in  order  to  secure  it. 

"We  have  repeatedly  referred  to  governmental  control. 
This  is  vested  in  the  State  legislatures  and  in  Congress. 
Because  of  the  complexity  of  the  problem  and  vast  amount 
of  detail  required,  this  power  has  usually  been  delegated. 
Here  in  Massachusetts  we  delegate  authority  to  the  Pub- 
lic Service  Commission  under  certain  restrictions  to  reg- 
ulate the  railroads  within  the  State.  Having  done  so  it 
behooves  the  Legislature  to  keep  its  hands  off  of  such 
matters  as  have  been  so  delegated. 

Since  the  initial  power  is  in  the  Legislature,  it  is  proper 
for  the  Legislature  to  change  the  rules  of  procedure,  to 
withdraw  delegated  powers  or  to  confer  new  powers.  It 
seems  unwise  and  improper,  however,  for  the  Legislature 
to  interfere  or  attempt  to  legislate  along  certain  definite 
prescribed  lines  which  they  have  clearly  delegated  to  the 
Public  Service  Commission  and  to  which  they  have  given 
ample  machinery  for  a  proper  determination  of  such 
questions,  which  machinery  is  not  available  for  the  in- 
formation of  the  average  legislator.  Yet  year  after  year 
we  are  confronted  by  petitions  from  an  overanxious 
public  to  do  the  thing  we  ought  not  to  do. 

There  is  always  the  other  side  to  this  question.  Eail- 
roads  need  regulation.  The  past  clearly  shows  it.  Let  us 
try,  however,  not  to  interfere  with  the  strictly  private 
functions  of  the  railroad.  Let  us  as  a  public  remember 
that  in  so  far  as  we  overemphasize  details  we  hamper 
service  and  increase  its  cost.  Let  us  remember  that  rail- 
roads are  a  necessity  and  not  an  evil ;  that  the  men  who 

17 


own  and  control  them  are  not  all  selfish  or  dishonest; 
that  there  are  men  striving  to  solve  the  great  transporta- 
tion problems  for  the  benefit  of  all  concerned.  Let  us 
remember  that  these  great  corporations  must  be  managed 
so  that  labor  shall  receive  fair  wages  and  proper  working 
conditions ;  that  capital  shall  receive  a  fair  return  on  its 
investment;  that  the  service  rendered  shall  be  safe,  con- 
venient and  at  a  return  sufficient  to  meet  those  claims. 
Eailroads  are  big  business,  but  this  is  a  big  country  and 
needs  big  business  so  long  as  it  is  properly  conducted. 
Public  opinion  must  be  cultivated  to  the  extent  that  busi- 
ness of  any  sort  shall  be  free  from  attack  if  properly 
conducted,  even  though  it  be  big  business. 

We  as  members  of  the  Legislature  are  directors  in  the 
great  business  of  the  body  politic.  You  are  the  stock- 
holders, and  as  such  we  are  responsible  to  you.  Judge  us 
by  facts,  even  as  you  would  judge  these  corporations. 
Do  not  expect  us  continually  to  hamper  unnecessarily  big 
business  as  such.  Think  for  yourselves  on  these  ques- 
tions and  give  us  credit  for  thinking  for  ourselves,  and 
do  not  expect  us  to  be  led  blindly  by  a  demagogic  appeal, 
simply  because  it  happens  to  be  a  big  corporation,  or 
because  big  corporations  are  affected.  Be  sure  there  are 
evils  to  be  corrected  and  that  the  legislation  is  wise  and 
proper  before  judging  us  as  acting  unwisely.  There  are 
too  many  people  to-day  ready  to  condemn  a  corporation 
unheard,  simply  because  it  is  a  corporation.  Take  the 
necessary  time  to  study  the  vital  public  questions.  Do 
you  realize  the  extent  of  minority  rule?  The  future  wel- 
fare of  the  Commonwealth  depends  not  only  on  the  eradi- 
cation of  those  evils  which  do  exist  relative  to  big  busi- 
ness, but  also  depends  upon  a  fair  opportunity  for  big 
business  to  carry  on  its  functions  properly  and  for  the 
benefit  of  the  entire  community. 

I  can  close  with  nothing  better  than  a  quotation  from 
DeTorqueville :  ^^No  philosopher's  stone  of  a  constitu- 
tion can  produce  golden  conduct  out  of  leaden  instincts ; 
no  apparatus  of  senators  and  judges  and  police  can  com- 
pensate for  the  want  of  an  internal  governing  sentiment ; 

18 


no  legislative  manipulation  can  eke  out  an  insufficient 
morality  into  a  sufficient  one;  no  administrative  sleight 
of  hand  can  save  us  from  ourselves.'' 


Chairman  McCaU:  The  next  subject  on  the  program  is 
* '  Co-operation, ' '  by  Frederick  J.  Hillman.  Mr.  Hillman 
is  unable  to  be  present  and  a  distinguished  clergyman  of 
Massachusetts  and  Springfield,  Dr.  Philip  S.  Moxom,  is 
to  take  part  in  the  discussion  instead  of  Mr.  Hillman. 

Dr.  Philip  S.  Moxom :  It  is  the  first  time  I  ever  filled  the 
Mayor's  chair,  and  I  am  quite  embarrassed.  I  stand 
before  you  as  a  frightful  example  of  unpreparedness. 
This  afternoon,  with  a  program  full  of  work,  a  persuasive 
and  masterful  voice  through  the  telephone  communicated 
something  that  I  did  not  perfectly  understand,  but  the 
upshot  of  it  was  I  was  desired  to  come  here  and  speak  on 
"Co-operation"  this  afternoon.  And  when  he  was  told 
that  I  had  no  time  he  made  some  very  complimentary 
remarks,  which  I  will  not  quote. 

But  I  am  in  very  good  company,  as  you  know — quite  in 
company  with  the  entire  nation.  I  think  sometimes  there 
are  men  who  conceive  that  clergymen  are  like  certain 
guns  with  which  one  company  of  a  regiment  to  which  I 
belonged  was  armed.  We  had  what  was  known  as  the 
Spencer  carbine,  which  by  filling  a  tube  that  was  inserted 
in  the  butt  of  the  gun  and  putting  one  cartridge  in  the 
chamber  gave  eight  successive  shots.  In  those  days  that 
was  a  remarkable  weapon.  On  one  occasion  we  captured 
some  Confederates,  and  one  of  them  said:  "When  you 
'uns  come  along  who  have  guns  like  what  we  'uns  have 
we  can  get  away  with  you,  but  when  you  'uns  come  along 
who  load  up  over  night  and  shoot  all  day  you  are  too 
many  for  us  'uns." 

Now,  the  best  that  I  can  do  is  listen,  and  I  have  listened 
with  a  great  deal  of  interest  to  the  addresses  of  Governor 
McCall,  President  Whitcher,  the  Mayor  and  Mr.  Wells. 
We  are  going  through  a  marvelous  change,  and  almost 

19 


unconsciously.  Miss  Frances  Power  Cobb  wrote  many 
years  ago  a  book  entitled  ^^The  Peak  in  Darien."  In 
that  book  there  was  an  essay  on  secular  changes  in  human 
nature.  Her  idea  was  that  certain  changes  come  uncon- 
sciously and  almost  involuntarily  without  any  clear  sense 
of  the  forces  that  are  producing  them,  and  in  the  course 
of  a  little  time  humanity  finds  itself  with  a  new  orienta- 
tion. We  are  more  or  less  unconsciously  in  the  midst  of 
such  a  change.  The  war  in  Europe  is  bringing  out  the 
deepening  sense  of  human  solidarity.  We  live  together 
on  this  planet,  and  we  have  got  to  find  a  way  by  which  we 
can  live  peacefully  and  helpfully. 

Now  everyone  who  thinks  on  this  matter  knows  that 
the  presence  of  the  individualistic  spirit  and  methods  in 
any  form  of  human  enterprise  makes  not  only  for  ineffi- 
ciency, but  also  for  controversy.  There  may  be  efficiency 
here  and  inefficiency  there,  but  the  average  of  the  whole 
will  be  below  what  reasonable  creatures  have  a  right  to 
expect.  It  is  only  through  co-operation — not  competition, 
but  through  co-operation — ^with  mankind  that  we  can 
really  attain  to  the  greatest  efficiency  in  living,  and  that 
co-operation  must  not  be  merely  the  co-operation  of  cer- 
tain interests  in  groups.  In  that  case  you  have  only 
intensified  the  competition  and  made  the  conflict  more 
destructive. 

We  have  been  coming  into  a  realization  of  the  fact  that 
safety  from  the  competition  of  definite  groups  is  to  be 
found  in  the  unity  of  one  group.  It  is  that  co-ordination 
of  human  society  in  which  all  interests  shall  work  for  a 
common  end ;  when  business  and  education  and  scientific 
research  and  politics  all  shall  be  dominated  by  that  spirit 
which  makes  life  a  co-operative  human  brotherhood. 

It  seems  to  me  that  this  is  the  big  thing  that  you  repre-' 
sent  here  to-day,  you  gentlemen  of  the  Massachusetts 
State  Board  of  Trade.  It  is  back  of  every  enterprise  in 
the  fields  of  industry  and  commerce.  We  have  got  to 
come  to  this  philosophy  at  last,  that  it  is  the  practical 
union  of  human  intelligences,  human  sympathies  and 
human  wills  that  must  be  reached,  so  we  may  attain  the 

20 


highest  efficiency  in  all  those  activities  which  engage  the 
hnman  hand  and  the  human  heart. 

Chairman  McCall :  I  think  we  are  all  glad  Dr.  Moxom  did 
not  have  notice,  because  he  gives  such  an  excellent  ad- 
dress.   He  might  have  spoiled  it  by  preparation. 

President  Whitcher :  I  have  an  idea,  Mr.  Chairman,  that 
all  have  not  registered.  You  understand  that  all  are  per- 
mitted to  register,  and  cards  will  be  circulated  so  that  all 
who  have  not  signed  may  do  so. 

Chairman  McCall:  Gentlemen,  there  has  been  a  change 
in  the  program  and  two  of  the  speakers  have  been  trans- 
posed from  the  evening  exercises  to  this  afternoon.  The 
next  subject  will  be  a  discussion  of  the  Canadian  Disputes 
Act  and  Other  Methods,  by  Dr.  Victor  S.  Clark  of  the 
Carnegie  Institution  of  Washington.  Dr.  Clark  is  a 
scholar  of  eminence,  and  I  am  sure  that  his  discussion  of 
this  question  will  be  very  interesting  and  instructive. 

Dr.  Victor  S.  Clark:  Mr.  Chairman  and  members  of  the 
Massachusetts  State  Board  of  Trade:  My  allotted  task 
this  afternoon  is  to  call  your  attention  to  some  of  the 
methods  that  other  countries  have  adopted  for  regulating 
labor  disputes  on  railways. 

I  presume  the  reason  your  secretary  invited  me  to  dis- 
cuss this  subject  is  that  it  has  been  my  duty  on  several 
occasions  to  investigate  these  methods  for  the  Federal 
government.  I  wish  my  remarks  to  be  interpreted  as 
descriptive  and  not  as  those  of  an  advocate  of  any  par- 
ticular law.  I  think  the  longer  that  one  studies  and  the 
more  that  one  studies  on  the  ground  these  various 
methods,  the  less  assured  he  becomes  in  advocating  any 
one  of  them;  and  especially  in  assuming  that  a  method 
successful  in  some  other  country  is  likely  or  is  certain 
to  be  successful  in  the  United  States.  Our  industrial 
organism  is  so  gigantic  compared  with  some  countries 
that  have  adopted  experimental  and  progressive  legisla- 

21 


tion  that  it  is  not  at  all  certain  that  it  could  be  contained 
in  the  same  sort  of  legal  containers  that  are  used  in  those 
countries. 

I  remember  an  incident  that  my  father  used  to  tell  me 
when  I  was  a  boy  of  a  trip  he  made  through  Yellowstone 
Park  in  the  very  early  days  when  it  was  customary  to  go 
through  with  a  military  escort.  He  and  some  of  the  other 
officers  who  were  with  him  were  standing  by  one  of  the 
big  geysers  and  threw  their  pocket  handkerchiefs  into  it. 
In  a  short  time  there  was  an  eruption  of  the  geyser  and 
the  handkerchiefs  were  thrown  out  beautifully  laundered. 
A  couple  of  soldiers  had  witnessed  this  experiment  with  a 
good  deal  of  interest.  They  ran  away,  and  on  their  return 
within  a  short  time  brought  back  with  them  a  couple  of 
dirty  army  blankets,  which  they  threw  into  the  geyser. 
In  due  time  the  geyser  returned  those  garments  quite  as 
well  laundered  as  were  the  handkerchiefs,  but  separated 
into  small  fragments  about  six  inches  in  diameter. 

Now  our  big  industries  might  go  into  a  legislative  ma- 
chine that  is  sufficient  to  deal  with  the  railroads  and  the 
industries  of  a  small  country  and  come  out — to  use  the 
soldier's  remark  on  that  occasion — in  a  '^chawed-up  con- 
dition,''  much  the  same  as  the  army  blankets. 

Government  ownership,  compulsory  arbitration  and 
compulsory  investigation  are  the  three  legislative  meas- 
ures that  are  proposed  and  discussed,  if  not  advocated, 
at  the  present  time.  Government  ownership  is  not  a  sure 
remedy  for  strikes  upon  railroads.  There  have  been  very 
bitter  strikes,  strikes  of  almost  revolutionary  bitterness, 
on  the  state-owned  railways  of  South  Africa  within  quite 
recent  memory.  There  have  been  strikes  on  the  railways 
of  New  South  Wales,  although  they  are  owned  by  the  gov- 
ernment and  a  compulsory  arbitration  law  is  enforced  in 
that  state.  In  fact,  considering  the  magnitude  of  our 
inland  commerce  and  of  the  machinery  that  serves  it,  for 
the  past  twenty-two  years  the  United  States  has  probably 
been  freer  than  any  other  great  industrial  and  democratic 
country  from  interruptions  of  traffic  due  to  labor  contro- 
versies. 

22  V 


Compulsory  investigation  is  best  known  to  us  through 
the  Canadian  law,  which  it  is  more  particularly  my  task 
to  discuss  this  afternoon.  The  principle  of  compulsory 
investigation  was  advocated  in  the  United  States,  and 
officially  advocated,  some  years  before  it  was  adopted  in 
Canada.  Many  of  you  will  recall  that  twenty- two  years 
ago  there  was  a  great  strike  on  the  railways  centering  in 
Chicago.  You  may  recall  the  vast  loss  of  property  and 
the  disquieting  civil  disorders  and  the  toll  of  death  that 
accompanied  those  disastrous  weeks.  That  strike  was  not 
officered  and  controlled  by  the  great  railway  brother- 
hoods, but  it  threw  into  confusion  the  entire  industrial 
organism  of  the  country,  and  order  was  not  restored  and 
traffic  was  not  resumed  without  interruption  until  Fed- 
eral troops  had  been  summoned  to  compel  obedience  to 
the  laws  and  restore  order.  Following  that  dispute  or 
strike  Congress  created  a  commission  to  investigate  its 
causes  and  to  propose  some  remedy  against  subsequent 
occurrences  of  the  same  kind.  That  commission,  as  a 
result  of  its  inquiries,  recommended  that  a  public  board 
or  tribunal  be  established  to  investigate  the  causes  of 
labor  dissatisfaction  based  upon  railroads  engaged  in 
interstate  commerce ;  to  publish  a  report  showing  its  find- 
ings ;  and  the  commission  further  advocated  that  pending 
this  investigation  and  the  publication  of  the  report  strikes 
and  lockouts  on  such  railroads  should  be  prohibited  by 
law.  As  you  all  know,  these  recommendations  were  never 
enacted  into  law.  Som  twelve  years  later,  however,  a 
very  bitter  and  protracted  coal  strike  occurred  in  Western 
Canada.  At  that  time  Manitoba,  Saskatchewan  and  Al- 
berta were  very  recently  settled  and  the  prairie  farmers 
were  dependent  on  the  output  of  these  mines  for  fuel  to 
heat  their  homes.  As  winter  approached — a  prematurely 
cold  winter  with  its  blizzards — these  prairie  homes  were 
absolutely  destitute  of  fuel.  Public  schools  were  closed 
and  industries  using  steam  power  faced  an  almost  imme- 
diate suspension  of  operation.  The  Dominion  govern- 
ment was  forced  in  this  crisis  to  send  its  officials  to  West- 
ern Canada,  and  they  by  moral  suasion  and  by  the  influ- 

23 


ence  of  public  opinion  finally  secured  tlie  resumption  of 
coal  production.  Following  this  occurrence  the  Canadian 
government  at  once  took  steps  to  enact  legislation  that 
would  prevent  another  strike  of  that  kind.  The  measure 
proposed  followed  the  lines  of  the  recommendation  of  the 
Chicago  strike  commission  at  the  time  of  the  strike  which 
I  have  just  quoted.  Mr.  McKenzie  King,  then  Deputy 
Minister  of  Labor  in  Canada,  in  recommending  this  law 
advocated  it  upon  the  ground  that  in  any  community 
private  rights  should  cease  when  they  become  public 
wrongs,  and  the  legislation  that  was  enacted  was  intended 
to  apply  only  to  those  industries  where  workers  in  en- 
forcing their  demands  inflict  a  greater  injury  upon  the 
general  public  than  any  possible  compensation  to  them- 
selves will  outweigh.  In  other  words,  the  law  attempts  to 
embody  in  legislation  the  principles  of  the  greatest  good 
to  the  greatest  number. 

The  jurisdiction  of  the  Canadian  Act  extends  to  rail- 
ways, telegraph  and  telephone  lines,  electric  light  and 
power  companies  and  to  all  industries  that  were  embraced 
under  the  definition  of  public  utilities.  Coal  and  metal 
mining  have  been  brought  under  the  Act,  perhaps  a  little 
illogically,  but  on  account  of  the  coal  strike  to  which  I 
have  just  referred  arose  the  passage  of  the  law.  In  other 
industries  men  are  free  to  strike  and  there  is  no  compul- 
sory investigation,  with  a  single  exception,  and  that  is 
due  to  the  present  war.  An  order  has  recently  been 
issued  extending  the  Canadian  Disputes  Act  to  munition 
workers  and  others  employed  in  similar  enterprises. 

In  any  of  the  industries  I  have  mentioned,  if  either  the 
workers  or  the  employers  desire  to  change  the  condition 
of  employment;  if  the  workers  demand  more  wages  or 
shorter  hours,  or  the  employers  desire  to  introduce  any 
new  regulation  that  affects  directly  the  workers,  the  party 
proposing  the  change  must  notify  the  other  party  thirty 
days  before  the  proposed  change  will  go  into  effect.  There- 
upon the  other  party — the  workers  or  the  employers  as 
the  case  may  be — have  the  right  to  appeal  to  the  Cana- 
dian Minister  of  Labor  for  a  brief  investigation,  stating 

24 


in  their  application  that  a  strike  or  a  lockout,  as  the  case 
may  be,  will  ensue  if  their  demands  are  not  satisfied.  The 
Minister  of  Labor  thereupon  assures  himself  of  these 
facts,  and  if  he  finds  them  to  be  as  stated  he  orders  a 
board  to  be  appointed.  One  member  of  this  board  is  a 
representative  of  the  workers ;  the  other,  the  second  mem- 
ber, is  a  representative  of  the  employers,  and  the  workers 
and  the  employers  appoint  a  third  member,  although  if 
either  the  workers  or  employers  refuse  to  appoint  him 
or  cannot  agree  the  Minister  of  Labor  appoints  him.  It 
is  not  a  salaried  board.  It  is  paid  a  per  diem  during  the 
time  it  is  sitting;  has  the  powers  of  a  court  to  summon 
witnesses  and  to  take  testimony  under  oath;  to  examine 
firm  books  and  papers,  though  in  practice  that  examina- 
tion is  usually  confined  to  the  Federal  member  of  the 
board  and  the  representative  of  the  employers  and  an 
inspector  in  the  works  or  premises  involved  in  a  strike; 
and  to  interrogate  employees. 

The  functions  of  this  board  are,  first,  if  possible,  to 
conciliate  the  disputants.  That  is,  to  act  as  a  friendly 
broker  between  the  employers  and  the  workers  and  bring 
them  to  a  voluntary  settlement.  This  is  accomplished  in 
most  cases,  and  perhaps  if  you  were  to  single  out  any  one 
element  of  the  Canadian  Act  that  had  been  more  valuable 
to  Canada  than  any  other,  it  would  be  the  success  of  these 
members  in  bringing  disputes  to  a  voluntary  settlement. 
Then  the  board  may  act  as  a  board  of  arbitration,  pro- 
vided the  two  parties,  though  they  cannot  come  to  a  set- 
tlement, have  enough  confidence  to  agree  to  abide  by  its 
findings. 

The  board  has  the  third  important  function  in  case  it 
cannot  conciliate  the  parties  and  they  are  not  willing  to 
arbitrate.  In  case  a  situation  arose,  for  instance,  such 
as  arose  last  summer  on  our  railways.  It  has  the  author- 
ity to  investigate  the  grounds  of  the  dispute  and  to  make 
a  report  to  the  public,  stating  what  it  considers  to  be  a 
fair  solution  of  the  difficulty.  Pending  this  investigation 
it  is  illegal  for  the  men  to  strike,  and  it  is  illegal  for  the 
employers  to  lock  out  their  employees.    Penalties  ranging 

25 


from  $50,  I  believe,  to  a  $1,000  for  an  illegal  lockout — I 
have  got  the  penalties  here  somewhere — and  from  $10  to 
$50,  I  believe  it  is,  for  striking,  and  similar  penalties  for 
aiding  or  inciting  any  illegal  strike  can  be  imposed. 

The  number  of  controversies  that  has  come  before  the 
boards  during  the  existence  of  the  Canadian  law — I  am 
not  reading  the  paper  here  at  all,  or  following  the  paper, 
but  I  have  these  figures  in  another  place — the  statistics 
are  about  as  follows :  Up  to  the  middle  of  last  October  212 
disputes  have  been  referred  for  adjustment  under  the 
law  and  21  strikes  had  occurred,  so  that  about  nine  out 
of  ten  disputes  were  settled  w^ithout  suspending  work.  Of 
these  212  disputes,  167  were  reported  upon  by  boards  or 
ended  through  their  mediation  and  others  were  ended 
before  the  boards  were  organized.  Of  these  disputes  85 
were  on  railroads  and  7  strikes  occurred.  There  were  11 
shipping  disputes ;  3  fell  upon  telegraph,  2  upon  telephone 
and  4  upon  light  and  power  companies,  which  were  settled 
without  a  single  loss  of  employment. 

In  metal  mining  only  ten  out  of  fifteen  controversies 
referred  to  boards  were  amicably  settled  by  them.  The 
reason  why  the  success  is  less  in  the  mining  field  is  prob- 
ably twofold.  In  the  first  place,  the  Miners'  Union  had 
been  very  hostile  to  the  law,  and  miners  are  perhaps  less 
easily  controlled  by  their  own  leaders  than  railway  em- 
ployees, for  instance.  And  the  second  reason  is  that  the 
public  for  the  most  part  has  not  been  particularly  inter- 
ested in  the  mining  disputes  that  have  occurred  since  the 
law  went  into  force.  None  of  them  has  caused  the  same 
inconvenience  as  our  big  anthracite  strike. 

Nearly  all  of  the  strikes  have  been  legally  begun.  That 
is,  they  are  strikes  that  have  been  entered  into  after  the 
boards  have  reported  their  findings,  and  in  several  cases, 
particularly  in  the  railway  strikes — the  most  important 
railway  strike,  I  believe,  was  on  the  Grand  Trunk— the 
employers  have  been  the  parties  to  refuse  to  put  in  force 
the  recommendations  of  the  board,  and  the  men  have 
promptly  struck  to  enforce  the  recommendations  of  the 
board.    However,  there  have  been  some  strikes  in  open 

26 


violation  of  the  law.  If  the  law  is  violated  the  Dominion 
government,  as  a  rule — well,  in  all  cases,  I  think — has  left 
the  enforcement  of  the  law  either  to  the  aggrieved  parties 
of  the  dispute,  who  can  bring  action,  or  to  the  local  gov- 
ernment. 

No  large  body  of  men  has  been  put  in  jail  for  striking. 
I  believe  some  100  or  110  coal  miners  in  British  Colombia 
were  imprisoned  for  a  short  time.  One  employer  has  been 
fined  for  an  illegal  lockout  and  a  number  of  union  leaders 
have  been  fined  for  advising  or  inciting  a  strike.  In 
those  cases  the  fine  is  suspended  and  the  leaders  usually 
cease  their  agitation.  In  Nova  Scotia  officers  of  the 
United  Mine  Workers  have  been  convicted,  both  in  the 
lower  court  and  on  appeal,  for  giving  strike  relief  to  mem- 
bers of  their  organization  who  were  striking  against  the 
law. 

A  good  many  people  in  this  country  and  a  few  in  Can- 
ada argue  that  unless  the  law  is  invariably  enforced  the 
penalties  are  useless  and  that  it  would  be  better  not  to 
have  them.  If  you  are  to  take  the  penalties  out  of  the  law 
I  think  there  would  be  very  little  opposition  to  it  from 
labor  leaders  in  this  country.  However,  even  if  the  penal- 
ties were  enforced,  neither  side  to  a  controversy  vitally 
atfecting  the  government  dares  openly  to  defy  the  law. 
It  puts  too  powerful  a  weapon  in  the  hands  of  their  op- 
ponents and  it  prejudices  their  case  too  much  in  the  court 
of  public  opinion.  There  has  been  no  great  strike  in 
Canada  in  opposition  to  the  law,  and  I  think  there  never 
will  be. 

It  has  been  some  years  since  I  personally  visited  Can- 
ada for  the  express  purpose  of  investigating  this  legisla- 
tion. Incidentally,  I  made  a  few  inquiries  while  on  a  vaca- 
tion trip  last  summer,  but  they  were  not  of  a  kind  to  cover 
the  field.  When  I  was  there  I  went  through  all  the 
provinces  two  years  in  succession  to  study  this  question 
and  found  the  general  public  and  practically  all  employers 
backing  up  the  law  with  very  little  reservation.  It  seemed 
to  me  from  the  number  of  working  people  I  interviewed 
that  the  mass  of  the  rank  and  file  of  workers  favored  the 

27 


law.  There  was  some  opposition  from  miion  officials. 
That  opposition  was  more  marked  in  case  of  the  inter- 
national unions  than  in  case  of  the  Canadian  unions.  It 
is  very  natural  for  the  executives  of  the  United  Mine 
Workers  and  the  Federation  of  Miners,  the  Western  Fed- 
eration of  Miners,  and  for  the  great  railway  brotherhoods 
over  here  on  this  side  of  the  border  to  oppose  a  law  that 
makes  necessary  a  definite  kind  of  negotiation  in  case  of 
a  prospective  strike  or  any  effort  to  establish  a  certain 
wage  scale  on  both  sides  of  the  border.  Of  course,  the 
Canadian  law  makes  it  practically  impossible  for  these 
organizations  to  call  a  sympathetic  strike  in  Canada  to 
enforce  a  demand  on  this  side  of  the  border. 

I  think  my  time  will  allow  me,  and  perhaps  I  will  go 
more  into  detail  if  there  are  no  objections.  I  am  simply 
speaking  now  of  conditions  of  sentiment  as  I  found  it. 
There  was  not  any  outspoken  criticism  of  the  law.  In 
1910  the  original  act  was  amended.  At  that  time  the 
Minister  of  Labor  read  letters  in  Parliament — which  yon 
will  find  in  the  American  Hansard  for  1910 — ^he  read 
letters  from  the  representatives,  from  the  brotherhood  of 
locomotive  engineers,  the  railway  trainmen,  of  main- 
tenance of  way  employees  and  from  the  order  of  railway 
telegraphers;  all  commending  the  existing  law  and  the 
proposed  amendment.  The  president  of  the  brotherhood 
of  maintenance  of  way  employees  characterized  the  act 
as  *^one  of  the  best  pieces  of  legislation  that  has  been 
passed  to  my  knowledge  in  the  interest  of  industrial 
peace. ' '  In  1912  Sir  George  Ashcliffe  investigated  this  law 
for  the  British  Board  of  Trade.  He  was  selected  to  make 
this  investigation  because  he  had  had  a  wide  experience 
as  a  councillor  and  arbitrator  in  Great  Britain  itself.  He 
was  thoroughly  familiar  with  the  practical  side  of  labor 
arbitrations.  In  his  report  he  says  that  the  representa- 
tives of  railway  labor  in  Canada  appear  to  recognize  that 
the  holding  up  of  a  railway  system  by  a  strike  was  a  pro- 
cedure justifiable  only  as  a  procedure  of  last  resort,  and 
that  it  was  due  to  the  public  that  every  possible  step  be 
taken  before  recourse  was  had  to  a  strike.    The  accep- 

28 


tance  of  the  theory  that  the  public  have  a  right  to  be  in- 
formed impartially  on  the  merits  of  the  question  that 
gravely  threaten  their  welfare,  and  the  spirit  of  the  Dis- 
putes Act  has  been  so  far  adopted  by  those  concerned  with 
the  Canadian  railway  systems  as  to  place  the  country  in 
almost  as  safe  a  condition  against  serious  stoppage  of 
traffic  as  it  is  possible  to  reach. 

This  year  the  Trade  and  Labor  Congress  in  Canada 
passed  a  resolution  asking  for  the  repeal  of  the  act. 
There  are  two  rival  organizations  in  Canada,  the  Trade 
and  Labor  Congress  and  the  Canada  Federation  of  Labor, 
which  is  composed  very  largely,  or  perhaps  entirely,  of 
all  Canadian  unions.  The  Canadian  Federation  of  Labor 
last  year  passed  a  resolution  in  support  of  the  act.  The 
kernel  of  the  labor  hostility  to  the  Canada  law  centers 
around  the  prohibition  of  strikes,  but  a  number  of  other 
objections  are  made  to  its  application  in  this  country. 

I  want  to  emphasize  the  fact  that  the  Canada  Arbitra- 
tion Law  is  not  a  compulsory  arbitration  act.  Li  boards ' 
reports  of  labor  meetings  and  in  public  discussions  of  this 
question  I  have  myself  heard  the  law  referred  to  re- 
peatedly as  a  compulsory  arbitration  law.  Of  course,  it 
is  no  such  thing.  A  compulsory  arbitration  law  is  a  law 
that  compels  parties  to  a  dispute  to  submit  their  dispute 
to  a  public  tribunal  and  then  to  obey  the  award  of  that 
tribunal  for  all  time,  and  you  can  see  from  what  I  have 
said  that  the  Canadian  law  does  neither  one  of  these 
things.  They  are  compelled,  it  is  true,  to  submit  every 
dispute,  in  a  way,  to  a  tribunal,  but  they  are  not  com- 
pelled to  submit  their  dispute  as  if  to  arrive  at  a  final 
settlement. 

The  first  objection  to  the  Canadian  law  by  our  labor 
leaders  is  that  it  is  unconstitutional.  I  think  the  Presi- 
dent probably  disposed  of  that  argument,  so  far  as  a 
layman  need  treat  of  it,  in  his  message  to  Congress.  Per- 
sonally I  should  feel  as  much  opposed,  and  I  think  all  of 
you  gentlemen  would,  as  any  labor  leader,  to  establishing 
compulsory  servitude  in  this  country,  but  a  railway  sig- 
nalman cannot  leave  his  duties  in  such  a  way  as  to  en- 

29 


danger  life  and  property  in  transit.  A  sailor  cannot 
desert  a  vessel  so  as  to  endanger  it  during  its  voyage,  or 
even  to  prevent  its  completing  its  voyage.  Labor  unions 
themselves  limit  the  right  of  their  members  to  accept 
employment  and  to  retain  employment  and  to  leave  em- 
ployment. Our  labor  laws,  especially  those  relating  to 
women  and  children,  condition  the  terms  of  employment 
in  many  ways.  We  are  constantly  and  increasingly  hem- 
ming around  the  working  conditions  of  labor  new  limita- 
tions. Now  the  Canadian  law  simply  adds  one  more  to 
those  limitations.  It  simply  says,  ^*If  you  accept  employ- 
ment on  railways  serving  the  general  public  on  public 
service  railways,  you  may  leave  any  time  you  please  as 
an  individual,  and  individually  you  cannot  be  made  a 
slave,  if  you  want  to  put  it  that  way,  but  you  cannot 
organize  to  interrupt  that  traffic  on  those  railways  in 
order  to  enforce  a  labor  demand.''  Most  of  us  know  that 
the  demands  last  summer  made  by  the  railway  brother- 
hoods affected  only  a  minority  or  a  fraction  of  the  mem- 
bership of  the  brotherhoods.  You  know  that  one  of  the 
objections  to  arbitrating  the  question  was  a  fear  felt  by 
the  railways  that  they  would  have  to  submit  to  some  out- 
.side  tribunal  an  eight-hour  principle  where  they  already 
had  attained  it.  Now,  consequently,  last  summer  the 
brotherhoods  organized  and  tried  to  enforce  a  demand 
in  which  only  a  part  of  their  members  were  personally  in- 
terested. That  is  certainly  a  different  thing  from  regula- 
ting the  condition  of  employment  of  every  individual  on 
the  road.  That  is  a  different  thing  from  the  employees 
being  free  to  leave  and  accept  employment  as  individuals. 
However,  the  objections  of  labor  leaders  go  further 
than  that,  and  many  of  them  are  probably  very  well  taken. 
Their  objections  to  the  arbitration  boards  established  by 
the  Newlands  Act  apply  with  equal  force  to  the  boards  as 
at  present  constituted.  They  say,  very  properly  I  think, 
that  the  workers  are  put  to  a  very  large  expense  to  edu- 
cate the  neutral  members  of  these  boards  in  the  ele- 
mentary principles  of  railway  operation.  They  have  to 
accumulate  a  lot  of  testimony;  they  have  to  lose  a  lot  of 

30 


time  to  inform  the  chairmen  of  the  boards,  who  are  men 
perhaps  in  private  life,  and  who  know  very  little  of  run- 
ning railways ;  to  inform  those  men  upon  the  elementary 
questions  that  are  not  a  part  of  the  negotiations  with  the 
employers.  They  don't  have  to  take  into  account  at  all 
things  that  are  matters  of  common  knowledge.  Then,  as 
a  natural  result  of  that,  they  often  pronounce  unworkable 
awards.  The  Canadian  boards  cease  to  exist  as  soon  as 
they  have  made  a  settlement  of  a  dispute  or  reported  a 
finding.  That  leaves  the  application  of  the  agreement 
that  ends  the  dispute  entirely  in  the  hands  of  the  railway 
managers,  and  the  workers  complain,  probably  with  jus- 
tice, that  this  is  very  much  as  if  a  judge  in  a  law  suit  left 
the  enforcement  of  the  decision  entirely  with  one  of  the 
parties  to  the  law  suit.  These  objections,  based  on  ex- 
perience with  arbitration  boards  in  this  country,  have 
prejudiced  our  labor  unions  against  the  Canadian  Act, 
and  if  any  legislation  along  that  line  is  adopted  in  this 
country  those  difficulties  should  be  overcome  so  far  as 
possible. 

A  few  weeks  ago  I  was  present  at  a  meeting  of  the  com- 
mittee of  the  Civic  Federation  to  consider  this  legislation, 
at  which  the  heads  of  four  of  the  largest  of  the  brother- 
hoods were  present.  They  seemed  favorable  to  the  estab- 
lishment of  a  commission  or  a  committee,  possibly  as  part 
of  the  Interstate  Commerce  Commission,  consisting  of 
men  having  a  practical  knowledge  of  railway  operations ; 
perhaps  containing  former  railway  managers,  if  they 
could  be  procured  and  if  the  government  would  pay  a 
high  enough  salary  to  get  such  men  on  a  board,  to  investi- 
gate the  grounds  of  labor  controversies  on  railways  and  to 
report  a  finding.  Such  a  board  ought  to  have  the  same 
powers  of  summoning  witnesses  and  of  taking  testimony 
under  oath,  and  so  forth,  that  the  Canadian  Industrial 
Disputes  Boards  have,  but  they  would  not  need  to  use  that 
power  to  the  same  extent.  They  would  not  have  to  take  so 
much  testimony,  because  they  would  already  know  a  great 
many  things  that  any  temporary  board  could  not  possibly 
know — at  least  the  Federal  members  could  not  know. 

31 


However,  the  brotherhood  representatives  were  opposed 
to  giving  this  board  power  in  such  a  way  as  to  make 
strikes  illegal  during  the  investigation.  Their  objection  to 
making  strikes  illegal  is  that  there  is  a  psychological 
moment  for  striking.  They  say  a  strike  is  like  the  assault 
of  an  army  corps.  Unless  it  is  made  at  just  the  right 
moment  its  chances  of  success  are  very  greatly  impaired. 
However,  it  would  be  impossible  at  the  present  time  for 
the  railway  brotherhoods  to  prepare  for  a  strike  without 
giving  their  employees  long  notice  beforehand  of  their  in- 
tention. They  would  have  to  procure  authorization  to 
strike  through  a  referendum.  We  know  that  last  summer 
as  early  as  May  or  June  people  at  all  familiar  with  the 
negotiations  between  the  railways  and  the  government 
knew  that  a  strike  was  impending,  and  I  am  informed  that 
the  President  of  the  United  States  several  weeks  before 
the  actual  crisis  had  virtually  prepared  his  message  for 
Congress.  I  have  that  on  the  authority  of  Judge  Cham- 
bers, who  was  present  when  that  part  of  the  message  was 
prepared. 

In  the  case  of  a  great  railway  strike  or  a  great  railway 
dispute  it  is  practically  impossible  to  have  a  sudden 
strike,  and  if  the  authority  of  a  wage  commission  or  of  an 
investigation  board  is  limited  to  railways  engaged  in 
interstate  commerce,  personally  I  see  no  great  disadvan- 
tage to  labor  in  the  legal  penalties.  r 

Another  constructive  suggestion  has  been  made  in  re- 
gard to  compulsory  investigation,  that  a  bureau  be  estab- 
lished, a  statistical  bureau  probably,  as  part  of  the  Inter- 
state Commerce  Commission,  gathering  data  that  would 
be  pertinent  to  labor  disputes;  and  gathering  that  data 
continuously  so  that  the  material  would  always  be  at 
hand.  You  probably  know,  many  of  you,  that  the  railway 
associations  of  the  three  great  districts  of  the  United 
States  have  their  statistical  bureaus  constantly  gathering 
material  of  this  kind,  and  that  the  brotherhoods  have  their 
own  statistical  agents  in  Washington  who  are  collecting 
data  to  use  in  future  disputes,  for  both  of  these  organi- 
zations are  partisan  agencies,  and  the  presentations  they 

3^ 


make  of  this  material  are  avowedly  partisan  presenta- 
tions. It  has  been  suggested  that  if  the  government  would 
take  over  this  department  and  have  a  statistician  of 
repute,  an  unbiased  statistician,  at  its  head  with  two  as- 
sistants, one  appointed  by  the  railroad  interests  and  the 
other  by  organized  labor,  and  such  a  group  of  agents  and 
inspectors  as  they  might  need,  it  would  be  possible  to  get 
these  representatives  of  these  two  sides  and  the  Federal 
statistician  to  unite  on  mere  statements  of  facts  covering 
a  very  large  share  of  the  controversial  statistical  material 
presented  and  thus  greatly  economize  the  labor  of  settling 
disputes.  Those  are  the  two  principal  constructive  sug- 
gestions that  have  been  made  with  reference  to  such  a  law 
as  the  Canadian  Act  if  it  were  adopted  in  this  country. 

However,  there  are  one  or  two  other  features  of  the 
Canadian  law  that  are  objectionable  from  a  labor  point 
of  view,  and  probably  equally  objectionable  from  the 
point  of  view  of  the  employers.  The  Canadian  Labor 
Ministry  has  adopted  the  policy  of  artificially  separating 
railway  disputes  so  as  to  limit  them  to  particular  systems. 
In  this  country,  you  know,  twenty  or  thirty  years  ago 
strikes  and  labor  controversies  for  the  most  part  were 
limited  to  a  single  railway  line  of  a  single  railway  system, 
that  since  the  passage  of  the  Erdman  Act  they  have  been 
mainly  confined  to  the  great  districts,  the  northern,  the 
southern  and  the  southwestern  districts.  Last  summer 
not  only  did  we  have  the  prospect  of  a  railroad  strike,  but 
the  terms  were  made  for  including  all  the  railways  of  the 
United  States.  That  is  the  tendency  of  voluntary  labor 
negotiations.  That  is  a  tendency  that  it  is  probably 
unwise  to  rage  against. 

Now  the  railway  leaders  are  afraid  that  if  a  law  were 
enacted  the  Administration  might  require  them  to  sepa- 
rate their  dispute  and  require  them  to  have  twenty  or 
thirty  hearings,  where  one  hearing  might  do.  The  policy 
of  joining  these  disputes  into  a  single  controversy  and 
handling  them  all  at  once  seems  to  me  a  very  wise  one 
and  one  in  which  the  Canadian  bar  is  in  error.  It  cer- 
tainly makes  a  great  deal  more  work  for  the  government 

33 


tribunals.  The  Canadian  practice  leads  to  unequal  con- 
ditions of  employment  in  districts  where  the  wages  and 
hours  of  labor  should  be  the  same.  It  also  causes  dif- 
ferent conditions  of  employment  to  exist  on  the  same 
systems  wherever  they  cross  the  international  boundary. 
Of  course,  as  you  know,  the  Grand  Trunk,  the  Canadian 
Pacific,  the  Great  Northern  and  other  railways  operate 
on  both  sides  of  the  border.  Now,  it  might  be  wise  if 
legislation  is  adopted  upon  the  Canadian  lines  to  provide 
for  joint  sessions  of  Canadian  ordinance  boards  and  joint 
findings  in  disputes  that  cross  the  border.  By  joining 
these  disputes,  by  having  them  apply  to  large  systems 
instead  of  single  systems,  one  of  the  main  objections  of 
the  workingman  might  be  overcome. 

The  first  criticism  of  the  Canadian  Act  that  you  hear 
from  labor  officials  in  Canada  who  are  opposed  to  it  is 
that  it  enables  strikebreakers  to  be  imported  and  prepara- 
tion made  for  a  conflict.  Of  course,  it  also  allows  the 
union  to  perfect  their  organization.  But  where  a  contro- 
versy covers  a  whole  district  of  the  country  or  the  whole 
United  States  it  is  impossible  for  employers  to  import 
strikebreakers.  Our  contract  labor  laws  do  not  permit 
workmen  to  be  brought  over,  and  they  do  not  exist  in  suf- 
ficient numbers  in  this  country.  Consequently  the  objec- 
tion that  by  postponing  a  strike  or  the  ability  or  the  right 
to  strike  an  injustice  is  done  to  labor  in  the  United  States 
is  very  largely  without  foundation. 

I  presume  there  are  a  good  many  other  points  that  a 
professional  labor  man  or  a  professional  railway  man 
would  suggest  and  many  other  difficulties  in  connection 
with  this  law.  That  controversies  between  labor  and  capi- 
tal on  the  railways  have  been  settled  so  well  as  they  have 
in  the  last  twenty-two  years  is  due  in  part  because  so 
many  of  our  railway  managers  are  themselves  ex-mem- 
bers of  the  railway  brotherhoods.  Mr.  Willard  of  the 
Baltimore  &  Ohio,  who  has  figured  so  prominently  in  the 
last  dispute,  I  believe  is  a  former  member  of  the  brother- 
hood of  locomotive  engineers. 

I  remember  some  time  ago  of  meeting  one  of  the  arbi- 

34 


trators  in  a  controversy  who  told  me  that  he  was  talking 
with  the  manager  w^ho  w^as  representing  the  railways  and 
found  that  he  was  a  former  locomotive  engineer.  The 
arbitrator  told  how  he  remarked  that  he  supposed  the 
manager  also  was  a  former  member  of  the  brotherhood 
of  locomotive  engineers.  The  manager  smiled  and  said, 
''I  never  joined,  and  I  will  tell  yon  why.  When  I  was 
promoted  to  be  an  engineer  I  was,  of  course,  a  member 
of  the  brotherhood  of  locomotive  firemen.''  He  said: 
"I  had  such  a  grudge  against  the  locomotive  engineers 
that  I  vowed  that  I  would  never  join  the  order." 

There  is  a  great  deal  of  advantage  in  having  the  dis- 
putes on  railways  adjusted  so  far  as  possible  by  men  who 
know  so  intimately — by  railway  managers  who  know  so 
intimately  at  first  hand — the  sentiments  and*  feelings  of 
the  workers  whom  they  employ,  and  in  the  settlement  of 
railway  troubles  in  this  country  it  seems  to  me  that  so 
far  as  possible  effort  should  be  made  to  utilize  the  expe- 
rience of  men  of  this  type,  and  arbitration  boards  should 
intervene  only  as  a  last  resort.     (Applause.) 

Chairman  McCall:  Gentlemen,  the  next  speaker  is  Mr. 
John  F.  Tobin,  president  of  the  Boot  and  Shoe  Workers' 
Union,  who  has  a  great  practical  knowledge  of  the  ques- 
tions relating  to  labor  and  who  is  able  to  discuss  them 
very  intelligently  and  fairly.  He  will  speak  upon  the  sub- 
ject of  labor  problems. 

Mr.  John  F.  Tobin:  Your  Excellency  and  gentlemen  of 
the  State  Board  of  Trade :  I  think  about  the  only  qualifi- 
cations that  I  can  advance  as  a  student  of  railway  prob- 
lems is  that  I  have  in  my  time  owned  a  baby  carriage  and 
a  wheelbarrow.  That  is  as  near  as  I  have  ever  come  to 
having  any  knowledge  of  railroad  business,  and  I  was  at 
a  loss  when  Mr.  Whitcher,  the  president  of  your  associa- 
tion, mentioned  to  me  that  he  had  been  asked  a  questio;ii 
as  to  what  a  shoe  worker  knows  about  railroad  transpor- 
tation problems. 

I  take  it  that  the  labor  problem  as  applied  to  railroads 

35 


does  not  differ  materially  from  the  problems  that  we  have 
in  shoe  manufacturing  or  in  employment  of  any  kind. 
Our  problem  is  the  problem  of  the  human  relations  be- 
tween the  employer  and  the  employee,  and  that  applies  in 
every  activity  in  life.  I  was  interested  when  I  heard  that 
Dr.  Clark  was  going  to  discuss  the  Canadian  Act  and 
commonly  known  to  workingmen  as  the  Lemieux  Act.  If 
I  were  a  lover  of  warfare  I  should  have  licked  my  chops 
in  anticipation  of  disagreeing  with  Dr.  Clark.  I  find 
that  he  does  not  endorse  enthusiastically  the  doctrine  of 
compulsory  investigation  or  compulsory  arbitration.  He 
comes  nearer  endorsing  compulsory  investigation  than 
he  does  compulsory  arbitration. 

Now  there  are  good  and  sufficient  reasons  from  the 
workingman's  point  of  view  why  compulsory  investign- 
tion  and  compulsory  arbitration  are  objectionable.  I  call 
your  attention  to  some  things  with  which  you  are  familiar 
which  have  occurred  very  recently.  When  this  railway 
brotherhood  strike  was  impending  about  six  hundred 
delegates  were  in  convention  in  New  York.  The  strike 
was  almost  a  certainty.  The  President  of  the  United 
States  summoned  the  delegates  to  Washington  for  the 
purposes  of  conference  with  him,  and  then  between  him 
and  the  railroad  managers.  They  went  to  Washington 
and  were  there  several  days,  and  then  you  will  remember 
that  suddenly  the  six  hundred  delegates  went  to  their 
respective  homes,  and  I  discovered  while  in  Baltimore  a 
few  weeks  ago  while  attending  a  meeting  of  the  American 
Federation  of  Labor,  where  the  four  brotherhood  chiefs 
appeared,  why  they  were  sent  home.  It  developed  that 
in  the  negotiations  and  discussions  of  their  problems  in 
Washington  that  the  railroad  interests  were  arranging 
their  affairs  in  such  a  way  as  to  make  a  strike,  if  one 
occurred,  ineffectual.  In  other  words,  the  railroad  man- 
agements were  taking  advantage  of  the  fact  that  the 
railroad  brotherhood  leaders  were  absent  from  their 
posts  and  they  were  arranging  their  affairs  to  make  any 
strike  abortive.  As  soon  as  that  was  discovered  the  rail- 
road brotherhood  chiefs  who  were  then  in  Washington 

36 


arranged  a  code  message  and  then  departed  from  there 
to  their  homes.  And  I  learned  how  and  why  this  code 
message  was  arranged.  The  brotherhood  heads  were  to 
remain  in  Washington  to  avoid  the  possibility  of  having 
telegrams  sent  out  saying  that  the  strike  was  off  and  a 
settlement  was  reached,  so  that  the  men  wonld  probably 
go  back  to  work  on  the  strength  of  the  forged  telegrams, 
and  complications  arose  which  made  it  impossible  to 
make  a  strike  effective.  This  same  method  was  being 
practiced  and  the  railroad  heads  conferred  and  went  to 
their  homes,  leaving  the  brotherhood  chiefs  engaged  in 
Washington  for  the  settlement  of  the  difficulty. 

There  is  a  common  sentiment  that  the  railroad  brother- 
hoods demanded  the  eight-hour  law  from  the  President 
and  he  was  obliged  to  yield  that  to  them  in  order  to  avert 
the  great  calamity  which  would  befall  the  nation,  and 
especially  the  political  party  of  which  he  was  the  head. 
Let  me  tell  you  that  nothing  can  be  further  from  the  truth. 
The  railroad  brotherhoods  did  not  feel  and  did  not  want, 
nor  did  not  demand,  the  eight-hour  day  from  President 
Wilson.  They  do  not  want  the  eight-hour  day  by  legisla- 
tion, and  organized  labor  does  not  want  the  eight-hour 
day  by  legislation,  because  they  know  that  this  legislation 
might  easily  be  followed  by  a  change  of  administration, 
and  it  has  occurred  from  time  to  time,  and  one  legislature 
might  enact  the  eight-hour  day  and  another  legislature 
the  next  year  might  reverse  that  and  increase  the  hours. 
If  you  subscribe  to  the  principle  of  the  eight-hour  day 
you  also  subscribe  to  the  adoption  of  a  ten  or  twelve  hour 
day  in  a  case  of  emergency  or  in  case  of  a  change  of  their 
views.  There  is  a  psychological  moment  when  a  strike 
may  be  effective,  but  if  you  allow  that  psychological  mo- 
ment to  pass  and  subscribe  to  an  investigation  and  the 
period  of  time  during  that  investigation  is  consumed  by 
the  employer  in  preparing  to  make  that  strike  abortive, 
then  you  see  the  disadvantage  to  which  the  employees 
are  put.  There  is  no  corresponding  disadvantage  to  the 
employer,  and  any  proposition  which  you  have  to  con- 
sider which  involves   relations   between  employee   and 

37 


employer  and  which  does  not  give  exact  measure  for 
measure  is  going  to  be  faulty  and  productive  of  disaster 
in  the  long  run. 

That  is  the  trouble  with  the  Lemieux  Act.  It  is  not 
workable  and  is  impracticable.  The  Canadian  Act  does 
not  compel  any  obedience  to  a  finding  of  a  board.  The 
case  in  Ontario  recently  was  a  case  of  the  employers  re- 
fusing to  comply  with  the  act,  and  in  the  case  of  the 
Quebec  miners,  and  there  were  five  coal  mining  companies 
involved  in  that,  and  they  failed  to  agree  upon  a  member 
of  the  board  of  investigation  and  no  investigation  took 
place.  The  dispute  continued  with  great  and  disastrous 
results.  It  is  absolutely  a  faulty  proposition,  and  the 
Canadian  Trades  and  Labor  Congress  has  gone  on  record 
as  favoring  the  repeal  of  the  law. 

Dr.  Clark  made  mention  of  that  fact  and  stated  that 
the  other  organization  was  heartily  in  favor  of  the  law. 
The  Canadian  Trades  and  Labor  Congress  is  to  Canada 
what  the  American  Federation  of  Labor  is  on  this  side  of 
the  line.  The  other  organization  is  but  a  primary  organi- 
zation, of  interest  to  employers  largely,  and  confining  its 
operations  almost  entirely  to  the  city  of  Quebec.  They 
are  just  a  mere  handful  that  holds  the  name  of  the  Cana- 
dian Federation  of  Labor,  as  distinct  from  the  interna- 
tional movement.  The  Canadian  Trades  and  Labor  Con- 
gress is  international  in  its  character,  and  they  have  a 
right  and  do  speak  for  the  workers  of  Canada,  organized 
and  unorganized. 

Now  why  do  I  say  that  they  speak  for  the  labor  men  of 
Canada,  organized  and  unorganized?  I  say  that  because 
they  have  the  best  right  to  speak  for  the  unorganized 
workers  of  Canada.  I  ask  you  who  has  a  better  right  to 
speak  for  the  unorganized  workers  than  the  organized 
workers?  Certainly,  employers  should  not  be  classed  as 
having  the  right  to  speak  for  the  unorganized  workers. 
Certainly,  the  judges  and  lawyers,  nor  even  the  clergy, 
have  a  right  to  speak  for  the  unorganized  workers  of 
either  Canada  or  the  United  States.  They  have  not  got 
their  viewpoint,  and  do  not  know  it  and  could  not  possibly 

38 


acquire  it.  Henc'e  the  ones  who  are  best  qualified  to  speak 
for  the  unorganized  workers  are  the  organized  workers. 

Now  why  should  the  organized  workers  speak  for  the 
unorganized  workers?  Because  the  whole  future  of  the 
organized  labor  movement  depends  upon  the  attitude  of 
the  unorganized  workers.  They  have  as  much  to  fear 
from  the  unorganized  workers  as  the  employer  has.  The 
greatest  source  of  unrest  in  this  country  comes  from  the 
unorganized  workers  that  are  the  victims  of  designing 
persons  who  lead  them  into  unwise  action  and  frequently 
disastrous  strikes  have  occurred,  as  in  the  city  of  Law- 
rence and  in  many  cities  of  this  country.  That  is  the 
danger  from  which  the  organized  labor  movement  suffers 
as  well  as  the  general  public. 

Now  we  hear  about  the  inconvenience  that  is  thrown 
upon  the  general  public.  Now  who  is  the  general  public. 
I  remember  very  distinctly  when  we  had  the  great  coal 
strike  here  a  few  years  ago  when  Mr.  Eoosevelt  was  Pres- 
ident. Mr.  Baer,  president  of  the  Eeading  Railroad  Com- 
pany, was  a  large  owner  of  anthracite  coal  mines  in  Penn- 
sylvania, and  he  is  famous  for  having  said  that  they  were 
the  God-given  custodians  of  the  mines,  and  by  reason  of 
that  they  should  determine  the  wages  and  conditions 
under  which  the  miners  should  work.  Our  government  is 
now  engaged  in  the  task  of  separating  this  God-given 
custodianship  from  the  railroads,  regardless  of  Mr. 
Baer's  proclamation,  and  I  think  properly  so.  I  think 
this  ownership  of  tlie  railroad  and  the  mines  combined 
has  some  relation  to  the  price  of  twelve-dollar  coal.  If 
we  had  labor  organizations  hooked  up  on  lines  of  that 
kind  you  would  have  every  reason  to  offer  serious  criti- 
cism and  complaint  against  our  method  of  managing  af- 
fairs, but  fortunately  we  are  not  in  that  position,  and  I 
want  you  to  understand  that  I  am  one  of  those  who  is 
opposed  to  giving  to  labor  unnecessary  power  to  impose 
its  dictum  on  the  general  public  or  upon  the  employer.  It 
is  not  healthful.  It  is  not  for  the  best  interest  of  the 
workers  themselves  that  they  should  become  intoxicated 
with  power. 

39 


What  is  one  of  the  greatest  difficulties  that  the  organ- 
ized labor  man  has  to  contend  with!  What  has  been  my 
greatest  problem  in  twenty-one  year  of  experience?  To 
hold  in  control  the  raw  recruits,  the  new  members  of  the 
organization,  and  the  big  problems  of  labor  in  this  coun- 
try are  being  faced  by  the  organized  crafts  that  are  deal- 
ing with  raw  material  that  goes  into  the  organization  of 
yesterday,  with  their  accumulated  grievances  of  years, 
and  they  come  in  to-day  and  expect  that  all  the  years* 
accumulation  of  grievances  must  be  redressed,  or  to-mor- 
row morning  at  nine  they  will  strike.  Now  an  ultimatum 
of  that  kind  is  utterly  destructive  to  the  peace  of  the  em- 
ployers themselves.  I  very  frequently  make  mention  of 
this  to  our  organizers  who  organize  various  industries, 
and  I  often  ask  a  man  who  has  succeeded  in  organizing 
a  body  of  men  this  question:  *^Have  you  presented  a  bill 
of  wages  yetr*  And  oftentimes  he  answers  quite  se- 
riously: **No;  but  we  have  one  prepared.'*  We  have  got 
to  handle  a  problem  of  that  kind  with  great  delicacy  and 
care.  Members  of  a  union  will  come  to  me  and  say:  '^I 
don't  see  as  our  condition  has  bettered  any  since  we 
joined  the  union.'*  And  after  they  are  told  that  they 
have  been  in  the  union  only  forty-eight  hours  they  will 
ask,  **What  did  we  join  the  union  for?  What  do  we  pay 
twenty-five  cents  dues  for?"  And  they  draw  it  out  and 
it  looks  like  twenty-five  dollars.  I  frequently  say  that 
labor  organizations  return  to  their  membership  a  very 
much  larger  percentage  than  you  get  from  the  average 
bank,  and  if  they  did  not  they  would  not  very  long  exist. 

Now  in  reference  to  compulsory  arbitration  and  com- 
pulsory investigation.  Compulsory  arbitration  implies  in 
its  essence  compulsory  servitude.  You  m^y  sugar  cover 
it  any  way  you  like.  It  means  compulsory  servitude.  The 
excuse  for  compulsory  arbitration  is  to  protect  the  public 
against  the  inconvenience  that  would  be  upon  it  if  a  gen- 
eral strike  of  railway  employees  should  take  place.  Well, 
now,  I  started  to  tell  you  my  experience  in  the  coal  strike. 
I  was  out  on  one  of  my  long  Western  trips  and  I  got  home 
after  seven  weeks'  absence  in  the  month  of  November, 

40 


and  it  was  extremely  cold.  I  found  my  family  of  little 
ones  without  a  piece  of  coal  in  the  house,  without  anything 
in  the  shape  of  fuel,  and  I  had  to  do  some  hustling  before 
I  got  in  anything  at  all.  Finally  I  got  some  soft  coal 
which  coked  in  the  furnace  and  caused  an  explosion.  If 
I  was  asked  to-day  because  of  the  inconvenience  and  suf- 
fering of  my  family  and  myself  would  I  subscribe  to  com- 
pulsory arbitration  I  would  say  ^^ No,''  most  emphatically, 
because  when  I  exchange  my  convenience  for  the  sacrifice 
of  liberty  I  have  paid  too  high  a  price  for  my  convenience, 
and  I  am  not  willing  to  pay  it,  and  the  working  people  of 
this  country  will  not  subscribe  to  compulsory  servitude 
under  the  guise  of  compulsory  arbitration.  There  is  a 
better  and  more  practical  way. 

Dr.  Clark  has  told  you  of  the  number  of  strikes  that 
have  occurred  under  the  Lemieux  Act.  He  told  you  the 
limitations  of  the  Lemieux  Act,  but  perhaps  was  not 
familiar  with  the  fact  that  it  extends  to  almost  everything 
now.  It  extends  to  shoe  manufacturing,  clothing  manu- 
facturing, harness  manufacturing,  saddlery,  and  all  kinds 
of  work  of  that  kind  and  to  all  business  which  has  any- 
thing to  do  with  the  army.    It  extends  that  way. 

Now  what  has  been  our  experience  in  the  operation  of 
the  Lemieux  Act  in  the  shoe  trade!  Under  the  Lemieux 
Act  there  can  be  no  stoppage  of  work  pending  this  ap- 
pointment of  an  investigation  commission.  The  investi- 
gation commission  is  appointed.  It  continues  and  it  is 
weeks  and  months  before  they  reach  a  conclusion,  and 
when  they  are  ready  to  hand  down  their  award  the  con- 
tract has  been  completed  and  the  award  is  absolutely  of 
no  benefit  to  the  workers  at  all.  Is  it  any  wonder  that  the 
Canadian  workmen  are  dissatisfied  with  the  Lemieux 
Act  1    That  is  the  way  it  has  worked. 

Now  as  to  my  plan ;  the  plan  which  we  have  worked  out 
in  the  shoe  trade.  Do  you  know  we  have  practically  elim- 
inated strikes  in  the  shoe  trades?  You  hear  of  strikes, 
but  they  are  of  the  unorganized  variety.  We  are  a  strike 
organization  if  necessary,  and  we  have  provision  for  it. 
We  have  strike  benefits  and  have  accumulated  large  funds 

41 


for  defensive  purposes,  but  we  spend  one  hundred  thou- 
sand dollars  a  year  for  sick  and  death  benefits  and  less 
than  a  thousand  dollars  a  year  for  strike  benefits.  "We 
have  factories  that  are  operating  under  our  contract,  and 
have  been  for  twenty  years,  without  the  slightest  inter- 
ruption throughout  the  entire  United  States  and  Canada 
since  1898.  In  the  Dominion  of  Canada,  where  the 
Lemieux  Act  is  in  force  we  have  not  had  a  single  strike. 
We  have  operated  there  continuously  for  the  past  fifteen 
years,  in  which  both  parties  to  a  dispute  select  one  to  rep- 
resent th)©m,  and  the  two  select  a  third.  They  naturally 
select  men  who  are  familiar  with  the  shoe  trade.  They  se- 
lect a  third,  who  is  considered  a  fair  and  impartial  umpire. 
They  gather  up- the  facts  and  they  render  their  decision. 
We  are  obliged  to  accept  the  decision.  We  have  had  very 
few  cases  of  arbitration  in  Canada.  W^e  are  able  to  settle 
our  disputes  by  sitting  down  and  discussing  the  evidence 
based  upon  the  facts.  Brown  pays  so  much  a  pair  for 
doing  this  operation  and  Jones  so  much,  and  we  are  will- 
ing to  pay  what  anybody  else  is  paying,  giving  due  allow- 
ance for  the  amount  of  work  and  the  system  under  which 
it  is  done,  and  we  have  been  able  to  maintain  comparative 
peace  and  at  the  same  time,  which  is  very  valuable,  com- 
parative freedom  of  the  workers  in  the  factory.  I  do  not 
mean  by  that  freedom  to  abuse  the  employer,  freedom  to 
act  in  an  arbitrary  and  unreasonable  way.  We  have  a 
rule  that  members  are  not  permitted  to  assume  the  func- 
tions of  the  association  as  individuals.  The  employer's 
right  is  recognized  to  hire  and  fire,  and  is  not  violated 
except  in  cases  where  discrimination  is  shown  union  mem- 
bers. 

When  our  members  used  to  say  to  us,  as  they  did  in  the 
earlier  days,  but  very  seldom  mention  it  now,  *'Why  do 
you  yield  to  the  employer  the  right  to  discharge  em- 
ployees T'  we  would  reply  that  **we  do  it  because  we  want 
to  preserve  your  right  to  quit. ' '  ^  ^Do  you  think  that  is  an 
equivalent  right?"  I  say  it  is  of  more  value  to  you  to  be 
able  to  quit  when  you  want  to  than  it  is  for  the  employer 
to  be  able  to  discharge  you,  because  when  you  are  earning 

42 


fifteen  dollars  and  you  are  offered  twenty  you  would  think 
that  you  were  badly  treated  because  the  union  did  not 
allow  you  to  leave  your  fifteen-dollar  job  and  accept  the 
twenty.  It  was  a  difficult  thing  for  our  people  to  get  to 
understand  that  at  first,  but  now  they  never  question  it. 

We  also  have  a  rule  that  no  person  or  persons  shall  con- 
spire with  another  to  quit  work  for  the  purpose  of  en- 
forcing any  demand  upon  the  employer,  and  he  shall  not 
then  say  that  it  is  in  the  exercise  of  his  right  to  quit  as 
an  individual.  They  sometimes  have  attempted  to  do  that 
and  have  carried  such  a  threat  into  effect,  but  we  meet 
such  a  situation  by  saying  that  you  are  fined  five  dollars 
and  discharged.  In  other  words,  we  provide  for  the  con- 
tinuous operation  of  the  factory  without  interference 
from  the  workmen,  who  believe  that  they  can  best  ad- 
judicate their  wrongs  through  the  union.  We  have  some 
people  of  that  kind  and  we  deal  with  them  in  that  way. 

Some  people  say  this  is  compulsory  servitude.  We  say 
'^No.''  They  enter  into  this  action  voluntarily.  It  is  a 
voluntary  act.  All  persons  are  free  to  quit  work  any  time 
they  want  to  without  a  single  moment's  notice.  They 
are  protected  individually,  and  why!  Because  in  the  long 
run  that  is  the  best  protection  for  them  and  for  the  em- 
ployer. I  do  not  hesitate  to  say  that  in  our  union  factories 
operating  under  our  contracts  the  wages  are  the  very 
highest  in  the  shoe  trade.  I  also  make  alongside  of  that 
statement  this  other  statement  that,  while  the  wages  are 
liigher,  the  profits  to  the  employer  are  also  higher  and 
more  secure.  The  employer  has  the  advantage  of  being 
able  to  produce  continuously,  to  fill  his  orders  on  time 
when  he  has  promised  them,  and  there  is  no  interruption 
from  the  beginning  of  the  year  to  the  end  because  of  labor 
disputes.  That  furnishes  a  splendid  avenue  through 
which  increased  profits  flow,  and  we  say  **give  us  our  por- 
tion of  this.'* 

What  is  our  portion?  Our  portion  is  what  the  competi- 
tive rate  in'the  shoe  trade  warrants,  plus  the  advantages 
which  you  have  because  you  are  free  from  labor  disputes, 
and  we  get  concessions  from  employers  that  unorganized 

43 


employers  do  not  yield  to  the  unorganized  shoe  workers. 
Now,  this  leads  us  to  the  broader  consideration  of  the 
railway  problem.  It  leads  also  into  other  lines  of 
industry.  There  is  nothing  in  the  world  to  hinder  rela- 
tions of  that  kind  being  established  between  all  em- 
ployers and  their  workmen — nothing  in  the  world!  It 
would  mean  to  some  employers  an  internal  revolution  of 
their  preconceived  notion  of  their  mission  in  life — to  be 
the  custodians  of  the  interests  and  welfare  of  their  em- 
ployees. There  are  many  well-meaning  employers  that 
have  that  viewpoint.  There  are  men  who  have  an  ulterior 
motive  in  setting  up  that  position,  and  they  will  expatiate 
with  great  glee  of  the  things  that  they  have  done  for  their 
workers  and  then  advertise  themselves  in  the  public  press 
because  of  what  they  are  doing  for  their  employees  in  the 
way  of  building  swimming  pools,  tennis  courts,  libraries, 
gymnasiums  and  many  other  things.  If  employers  gen- 
erally could  see  inside  of  the  mind  of  the  average  worker 
they  would  not  feel  so  much  pride  in  their  welfare 
schemes,  and  I  have  only  got  to  call  their  attention  to 
this  phase  of  the  question :  How  many  employers  do  you 
know  of  who  practice  welfare  work  who  would  permit 
their  employees  to  impose  welfare  activities  upon  them! 
If  a  swimming  pool  and  a  library  and  a  gymnasium  and 
a  lot  of  other  things  that  certainly  concerns  them  are 
good  for  the  workers  in  the  works,  what  is  the  objection 
against  the  same  thing  being  provided  for  the  employer! 
Perhaps  the  employer  will  say,  ^'Oh,  I  have  no  need  of 
them;  I  have  them  in  my  home.''  Well,  if  it  is  so  that 
indicates  the  difference  between  his  position  and  the  em- 
ployee. Is  there  any  good  reason  why  a  bathroom  should 
not  be  provided  in  any  worker's  house,  from  the  stand- 
point of  public  health,  cleanliness  and  right?  If  the  em- 
ployer has  a  library  in  his  own  house  why  don't  you  pro- 
vide the  necessary  wages  so  that  the  workman  can  also 
have  a  modest  library  in  his  house!  You  charge  him  with 
ignorance  and  you  contribute  to  his  ignorance  by  with- 
holding from  him  the  necessary  means  to  remedy  that 
condition.    I  know  of  employers  that  would  absolutely 

44 


resent  and  throw  back  in  the  face  of  their  employees  if 
the  employees  subscribed  and  furnished  it  to  the  em- 
ployer ;  if  they  undertook  to  set  up  a  swimming  pool  or  a 
tennis  court,  so  that  they  might  conserve  his  health,  so 
that  he  might  be  an  employer  for  many  years,  he  would 
resent  that.  (Laughter.)  And  if  the  employees  should 
select  a  physician  and  say,  ^^You  ought  to  be  carefully 
looked  after,  and  we  will  provide  for  you  a  physician  witli- 
out  expense, '^  how  many  employers  would  stand  for  it! 
They  would  say,  *'That  is  different."  A  gentleman  was 
telling  me  about  the  benefits  of  his  welfare  system  and  he 
said,  ^^I  have  a  physician  who  looks  after  the  welfare  of 
the  employees  all  the  time  that  my  factory  is  running,  and 
I  am  going  to  extend  that  work  to  care  for  the  wives  and 
families  of  my  employees."  ^^What  is  the  name  of 
your  physician?"  I  asked.  "Dr.  So  and  So."  "And 
what  is  the  name  of  your  employees^  physician?"  "Dr. 
So  and  So,"  mentioning  a  man  of  another  name.  It  oc- 
curred to  me  that  if  his  physician  was  good  enough  for 
him  he  ought  to  be  good  enough  for  his  help. 

Now  I  call  your  attention  to  these  things  for  the  pur- 
pose of  trying  to  draw  your  minds  into  the  right  channel 
as  employers  of  labor,  speaking  generally;  not  to  you  in 
particular,  but  to  employers  of  labor.  The  first  necessary 
thing  for  them  is  to  get  the  viewpoint  of  the  worker,  and 
after  you  have  gotten  the  viewpoint  of  the  worker  stop 
right  there  and  attend  to  your  own  viewpoint,  let  the 
worker  look  after  his  viewpoint,  and  if  you  get  him  to 
depend  upon  himself  he  will  look  after  his  viewpoint 
without  the  necessity  of  your  assistance.  He  will  make 
mistakes,  a  lot  of  them,  but  the  mistakes  will  lead  him 
eventually  and  finally  into  the  right  channel.  Do  not 
waste  your  time  in  looking  after  the  welfare  of  your  em- 
ployees. Convert  all  this  welfare  activity  into  a  little 
advance  in  wages.  Give  them  something  every  week,  not 
once  a  year  in  the  shape  of  a  bonus,  or  a  bathtub,  or  tennis 
court,  or  gymnasium,  which  many  of  them  don't  like  and 
never  use,  because  they  don't  like  them.    (Laughter.) 

I  know  some  people  who  curry  favor  with  the  employer 

45 


subscribe  to  those  things,  just  as  some  people  subscribe  to 
the  Lemieux  Act  in  Canada.  I  have  known  employers  to 
write  resolutions  of  commendation  of  an  employer's  good- 
ness to  his  workers  and  his  generosity,  hand  to  some  par- 
ticular employee  and  have  it  published  as  the  spontaneous 
act  and  expression  of  gratitude  to  the  employer.  Do  you 
suppose  that  those  things  are  calculated  to  inspire  a 
proper  respect  for  the  employer?  Not  at  all.  It  makes 
such  employees  easy  food  for  the  demagogue  who  comes 
along  and  bellows  upon  the  rights  of  labor.  ^'Eise  up, 
men,  and  rebel  against  your  chains  Throw  them  oif  and 
follow  me!'' 

The  legitimate  organizations  are  on  guard  every  min- 
ute, guarding  you  and  the  general  public  against  that  kind 
of  thing.  The  labor  man  is  not  dangerous,  is  not  in 
defiance  of  the  courts,  but  he  very  frequently  expresses 
himself  very  strongly  on  some  of  the  decisions  of  the 
courts.  To  give  you  an  example ;  just  one,  because  I  do 
not  want  to  take  much  more  time.  A  recent  strike  oc- 
curred on  one  of  the  railroads  in  our  good  old  Common- 
wealth and,  as  you  know,  there  is  a  law  which  provides 
that  where  a  strike  exists  and  an  employer  advertises  for 
help  he  must  state  that  there  is  a  strike  in  progress.  If 
he  fails  he  is  amenable  to  the  law.  This  particular  rail- 
road was  haled  into  court  because  they  had  violated  the 
law  in  that  way.  They  came  before  the  judge  and  the 
defendant's  lawyer  pleaded  that  there  was  no  strike 
within  the  meaning  of  the  law.  The  judge  decided  that 
there  was  no  strike  within  the  meaning  of  the  law  because 
it  was  not  accompanied  by  violence.  Then  you  blame 
workingmen  because  they  go  on  strike,  and  then  in  order 
to  make  it  a  strike  they  commit  some  breach  of  law  in 
order  to  make  that  a  legal  strike  within  the  meaning  of 
the  law. 

I  mention  this  as  an  instance  as  to  how  the  law  is  ad- 
ministered on  the  bench.  It  is  no  wonder  then  that  you 
find  labor  men  who  are  not  quite  in  accord  and  sympathy 
with  court  decisions — with  a  great  many  others  that  I 
might  cite  along  the  same  lines. 

46 


Now  you  want  to  know  what  you  are  going  to  do.  Many 
of  the  workers  who  are  now  unorganized  are  unorganized 
because  the  employers  have  made  diligent  effort  to  pre- 
vent their  being  organized.  They  spend  thousands  upon 
thousands  of  dollars  every  year  in  keeping  a  system  of 
spies  in  their  works  to  report  and  prevent  organization. 
Wasted  money !  They  get  reports  that  do  not  contain  a 
thread  of  truth  in  many  cases,  because  those  detective 
agencies  are  interested  in  continuing  their  employment 
and  they  must  furnish  information  which  convinces  the 
employer  that  their  services  are  valuable. 

The  best  way  to  solve  the  labor  problem  from  the  em- 
ployers^ point  of  view  is  for  them  to  come  out  flat-footed 
and  recognize  the  human  right  of  their  workers  to  be 
represented  by  and  through  their  organization.  No  mat- 
ter how  mismanaged  at  the  beginning!  Experience  and 
direct  dealing  with  them  across  the  table  over  the  prob- 
lems that  come  up  in  your  works,  making  them  responsible 
to  the  general  public  for  what  they  do,  is  the  best  preser- 
vation of  the  welfare  and  convenience  of  the  public  that 
I  know  of.  Instead  of  compulsory  arbitration  I  would 
say,  compulsory  organization.  Compulsory  organization 
will  establish  the  machinery  by  which  negotiations  can  be 
carried  on. 

We  heard  a  great  deal  during  this  railroad  squabble 
about  the  enormous  wages  the  brotherhoods  were  receiv- 
ing as  compared  with  other  branches  of  the  railways  in- 
terested. They  got  those  wages  because  of  this  organiza- 
tion. Instead  of  that  being  an  argument  against  the 
brotherhood  it  was  an  argument  in  their  favor  and  a 
suggestion  for  them  to  organize.  They  only  secured  those 
wages  because  of  organization. 

Now  let  the  other  branches  of  the  trades  be  organized. 
Let  it  be  a  compulsion  to  organize  and  to  have  representa- 
tion to  deal  with  such  cases,  and  let  them  pay  a  reasonable 
wage,  based  upon  the  cost  of  living,  cost  of  competing 
employment  and  every  other  element  that  may  enter  into 
the  problem.  Abandon  entirely  any  suggestion  of  com- 
pulsory servitude,  and  I  think  you  have  made  a  long  step 

47 


in  putting  ns  where  we  belong,  in  advance  of  all  the 
nations  on  top  of  the  earth.  We  have  the  driving  power ; 
we  have  the  efficiency;  and  the  duty  we  owe  to  ourselves 
and  nation  is  not  to  drive  beyond  the  speed  of  an  ordinary 
man,  the  average  man. 

This  talk  of  efficiency  and  of  the  arguments  made  in 
favor  of  efficiency  means  in  its  final  analysis  that  one  man 
will  do  all  the  work  and  everybody  else  will  be  idle.  That 
is  its  logical  conclusion,  no  matter  how  you  reason  it  out. 
It  means  that  five  hundred  men  can  do  the  work  of  a  thou- 
sand by  increasing  the  size  of  the  shovel. 

The  arduous  labors  in  many  industries  make  it  impos- 
sible for  every  man  to  be  physically  perfect.  Many  em- 
ployees are  physically  weak,  and  we  must  provide  for 
them  through  employment  or  through  charity.  They  have 
got  to  live,  and  if  we  devote  ourselves  to  finding  more  em- 
ployment at  higher  wages  for  shorter  hours  to  make 
everybody  able  to  consume  more  products  from  more 
factories,  that  is  what  means  progress. 

There  is  nothing  measures  the  prosperity  of  the  coun- 
try more  than  when  everybody  is  employed.  When  every- 
body is  out  of  employment  or  nearly  everybody  we  have 
a  condition  of  panic,  and  everybody  is  down  in  the  mouth. 
Now  let  us  build  up  a  condition  which  makes  not  for 
greater  production,  for  more  wages  for  a  few,  but  greater 
production  for  a  larger  number  working  more  leisurely 
and  shorter  hours,  so  that  everybody  can  enjoy  and  have 
an  opportunity  to  enjoy  the  good  things  of  life.  I  do  not 
believe  the  Creator  intended  us  on  this  earth  to  work  at 
top  speed  through  long  hours  that  some  might  roll  in 
luxury  and  idleness.  It  would  make  it  unnecessary  for 
me  to  have  the  job  that  I  have  had  for  twenty-one  years. 

Some  of  our  members  have  said  that  I  have  never 
worked  for  twenty-one  years.  But  I  have  worked,  and 
I  know  what  it  is,  and  I  became  at  one  time  one  of  the 
speed  merchants,  as  they  call  them.  I  set  myself  out  to 
get  the  reputation  and  I  got  it.  I  did  turn  out  an 
enormous  amount  of  work.  It  was  followed  very  shortly 
by  a  suggestion  that  there  should  be  a  readjustment  of 

48 


wages,  which  convinced  the  employer  after  I  again 
speeded  up  that  he  was  right,  only  with  the  exception  that 
he  did  not  take  off  enough  at  first.  (Laughter.)  All  at 
once  I  woke  .up  and  said,  ' '  I  am  not  going  to  do  this  any 
more.'^  And  I  said  a  fair  day's  work  is  about  twenty-one 
dollars  a  week,  and  you  could  not  drive  me  beyond  that 
possibly,  and  that  stopped  the  reduction  in  wages. 

We  have  in  this  country  a  very  large  element  of  farm 
workers  that  have  been  under  the  lash  for  so  many  years 
that  they  are  the  easy  prey  for  designing  employers  who 
impose  upon  them  and  add  to  their  burdens.  Those 
fellows  are  not  as  ignorant  as  we  believe  they  are.  Those 
gentlemen  are  going  to  make  in  this  country  a  serious 
situation  unless  we  deal  with  the  labor  situation  in  an 
intelligent  way  and  do  something.  Every  time  an  attempt 
is  made  to  destroy  organized  labor,  organized  labor 
grows.  Organized  labor  does  not  fear  it  at  all,  because 
it  emphasizes  its  need. 

Now  meet  them  on  a  common  ground.  That  is  the 
essence  of  the  whole  subject.  I  thank  you  for  your  atten- 
tion. 

Member  in  the  Audience :  Are  any  questions  in  order  ! 

Chairman  McCall :  It  is  suggested  by  the  President,  Mr. 
Whitcher,  that  that  should  be  postponed  until  afterwards. 
Mr.  Fish  desires  to  return  to  Boston  on  the  5.55  train, 
and  he  has  barely  time  now  to  make  his  speech. 

The  next  speaker  will  be,  gentlemen,  Mr.  Frederick  P. 
Fish,  who  is  a  distinguished  lawyer,  president  of  the 
Massachusetts  Commission  on  Education,  president  of 
the  National  Industrial  Conference  Board,  and  he  has  had 
a  wide  experience  in  industry  as  well  as  in  his  profession. 
He  will  speak  upon  the  value  of  our  industries  to  the 
public. 

Mr.  Frederick  P.  Fish :  Your  Excellency  and  gentlemen : 
After  the  strong  meat  of  the  afternoon  I  am  not  sure  but 
that  what  I  shall  say  is  very  mild  and  uninteresting,  but  if 

49 


it  in  any  degree  serves  to  soothe  the  minds  of  the  audience 
before  the  dinner  begins  I  shall  be  satisfied. 

We  live  from  day  to  day  and  almost  all  the  time  in  such 
a  systematic  and  orderly  fashion  that  we  have  to  stop 
and  think  before  we  realize  the  tremendous  complexities 
of  the  industrial  agencies  which  are  at  work  supplying  to 
us  the  things  that  we  need.  Here  we  are,  a  hundred  mil- 
lion people  in  this  country,  of  all  grades,  classes  and 
characteristics,  and  yet  although  we  live,  some  in  the 
cities,  some  in  the  country,  some  in  the  wilderness,  under 
all  possible  conditions,  we  all  of  us  have  the  opportunity 
to  get  substantially  everything  that  we  want,  need  or 
wish,  if  we  can  pay  for  it,  of  course.  It  is  available  for 
us,  and  it  is  available  for  us  because  the  industries  have 
been  so  developed  that  production  and  distribution  bring 
to  us  everything  for  which  there  is  a  market. 

And  it  is  a  really  wonderful  thought  when  you  come  to 
analyze  it,  when  you  think  what  that  means,  and  if  you 
will  stop  for  a  moment  and  think  what  has  lead  up  to  this 
result  I  think  you  will  feel  a  pride  in  the  achievements  of 
the  human  race.  It  is  not  so  many  thousand  years  ago 
that  we  were  savages,  and  each  man  for  himself,  and  now 
see  what  is  the  situation ! 

There  are  three  general  departments  of  industry.  The 
first  is  that  which  gets  the  raw  material  from  the  earth. 
The  miners,  the  agriculturists,  the  lumber  men  and  the 
fishermen  are  types  of  those  who  work  to  get  the  raw 
materials.  Another  class  is  those  who  take  these  raw 
materials  and  produce  something  from  them  that  people 
need,  and,  as  we  know,  there  are  many  hundreds  of  thou- 
sands and  millions  of  things  produced.  The  third  class  is 
the  transportation  class,  the  distributing  class,  of  workers 
which  takes  the  raw  material  or  the  finished  product,  as 
it  may  be,  and  carries  it  to  the  point  where  it  is  to  be  used 
or  consumed.  In  each  and  every  one  of  those  three  classes 
we  have,  as  I  say,  the  results  of  those  thousands  of  years 
of  progress. 

And  in  considering  that  progress  there  is  one  thought 
that  it  seems  to  me  must  come  more  strongly  to  the  minds 

50 


than  most  of  them  together,  and  that  is  that  while  all  this 
time  labor  has  been  at  work  in  one  way  or  another  to  deal 
with  these  raw  materials,  that  during  all  this  time  there 
has  been  that  saving  from  production  that  is  useful  for 
further  production  and  which  we  call  capital ;  that  labor 
would  have  been  fruitless,  that  capital  would  have  been 
ineffective  if  it  had  not  been  for  the  brains,  the  intelli- 
gence, the  imagination  and  the  capacity  of  men  who  have 
directed  the  operations  of  labor  and  capital  in  production. 

That  to  me  is  a  very  striking  thought,  and  if  you  will 
stop  for  a  moment  you  will  see  how  important  that 
element  has  been,  and  yet  it  is  one  that  is  largely  over- 
looked. We  hear  of  capital  and  of  labor  things  that  ought 
not  to  be  regarded  as  in  the  slightest  degree  antagonistic, 
])ut  we  rarely  hear  of  the  third  element  in  the  trinity, 
which  to  my  mind  is  the  most  important.  That  is,  in  the 
methods  of  getting  from  the  earth  those  things  that  we 
Avant ;  of  the  brains,  the  imagination  and  the  intelligence 
and  the  capacity  of  the  men  who  have  preceded  us  in  this 
world  and  of  the  men  who  are  working  to-day. 

In  the  first  place,  the  scientific  men  who  have  studied 
pure  science  and  have  mastered  its  laws,  found  out  how 
those  laws  operate  and  how  they  may  be  applied;  the 
inventors  and  the  discoverers  who  have  taken  the  raw 
materials  of  the  earth  and  subjected  them  to  the  laws  of 
nature,  who  have  invented  the  great  contrivances  by 
which  distribution  is  effected  about  us ;  as  compared  with 
fifty  years  ago  that  difference  is  marvelous.  As  com- 
pared with  one  hundred  years  the  difference  is  stu- 
pendous. 

Then  come  a  class  between  that  have  contributed  as 
much,  almost,  as  the  discoverers,  the  inventors  and  the 
scientific  men  to  the  wealth  and  success  of  our  country 
and  the  whole  world.  I  refer  now  to  the  administrators, 
the  business  men  and  the  teachers  who  have  organized  the 
methods ;  who  have  utilized  in  practical  form  the  discov- 
eries and  the  laws  that  the  scientific  men  have  worked 
out ;  that  have  educated  the  laboring  man  who,  as  a  labor- 
ing man,  has  nothing  except  his  muscle  and  his  deftnesis 

51 


of  hand ;  wlio  have  tramed  the  community  in  such  a  way 
that  everywhere  there  is  that  strong  and  definite  co-opera- 
tion leading  to  the  great  administrative  efficiency  of  our 
system  of  production  and  of  distribution. 

Now,  gentlemen,  I  have  taken  the  liberty  of  reminding 
you  of  this  situation  of  .which  you,  of  course,  all  know, 
because  it  seems  to  me  that  whenever  we  reflect  upon  it 
that  we  ought  to  feel  that  the  public  as  a  whole,  every 
member  of  the  public,  should  recognize  the  importance  of 
this  great  productive  efficiency  to  which  we  have  attained 
and  should  respect  the  record  of  the  past  which  has  led 
up  to  the  present  condition  of  things,  and  should  recog- 
nize the  absolute  necessity  of  dealing  fairly  and  sympa- 
thetically with  the  men  who  are  now  in  business  in  this 
country  who  have  taken  upon  their  shoulders  not  only  the 
burden  of  carrying  out  the  aspirations  and  the  activities 
of  our  forefathers  who  were  working  in  a  relatively  small 
way  and  under  very  simple  conditions,  and  doing  the  work 
well  enough  for  their  time. 

Not  only  have  the  men  of  to-day  assumed  that  burden, 
but  their  situation  has  been  enormously  complicated  by 
the  tremendous  changes  that  have  come  by  the  methods  of 
distribution  and  in  the  methods  of  work.  Factory  sys- 
tems, the  development  of  machinery,  electricity  in  its 
various  applications  is  a  great  servant  of  man,  and  the 
ten  thousand  other  things  we  have  among  us  the  last  fifty 
years  have  made  the  work  of  the  men  of  to-day  infinitely 
more  difficult  than  that  of  their  predecessors  in  the  olden 
times. 

There  is  a  feeling  in  the  community  of  respect  and 
gratitude  toward  them,  but  during  the  last  few  years,  as 
President  Wells  has  said,  there  has  developed  one  other 
feeling,  one  of  hostility,  and  the  time  has  come  when  that 
feeling  of  hostility  should  be  ended  and  that  men — all  of 
us,  those  who  directly  produce,  those  who  get  by  through 
service  like  the  lawyers,  the  doctors  and  the  clergymen, 
they  themselves  not  being  producers,  the  laborers  and  the 
capitalists,  and  everybody  else — should  appreciate  how 
important  it  is  that  our  industries  should  be  promoted  and 

5^ 


that  our  industries  cannot  be  promoted  unless  the  men 
who  are  conducting  those  industries  are  recognized  as 
sound  and  reputable  public  servants,  as  they  are,  taking 
them  generally.  And  unless  the  entire  community  get 
behind  them  in  their  efforts  to  produce  more  efficiently 
in  order  that  there  may  be  a  larger  product  in  the  form  of 
wages  to  be  hoarded,  in  order  to  be  the  basis  for  further 
production  and  generally  increase  the  wealth  of  the  world 
for  the  benefit  of  all  the  people  in  the  world. 

Now  everybody  is  in  the  same  boat  in  this  matter. 
Everybody  must  recognize  the  desirability  of  making  our 
business,  our  industries,  as  effective  as  possible,  and  in 
the  industries  everybody  should  recognize  that  they  have 
the  same  common  underlying  interests — that  is,  that  the 
industries,  large  and  small,  should  be  promoted  and 
should  be  helped. 

It  is  not  so  very  long  ago  when  it  was  very  common  to 
charge  the  smaller  manufacturers  and  tradesmen  with 
dishonest  practices.  The  wooden  nutmeg,  putting  sand 
in  sugar,  and  things  of  that  sort.  That  has  altogether 
disappeared  at  the  present  time  and  trade  to-day  in  the 
smaller  departments  is  conducted  upon  a  high  ethical 
basis.  It  is  not  so  very  long  ago,  but  later  than  the  other 
time,  when  great  industries  were  charged  with  evils  of 
the  most  serious  character,  and  they  had  evils  which  were 
exaggerated,  as  were  the  evils  of  the  small  firms  at  an- 
other period,  and  I  am  just  as  certain  that  there  has  been 
the  needed  reform  in  the  big  business  as  there  has  been 
in  the  methods  of  small  business  to  which  I  have  referred, 
and  that  the  time  has  come  when  it  is  the  duty  of  every 
man  in  the  community  to  undertake  to  promote  by  giving 
to  the  industries  and  the  men  in  the  industries  that  fair, 
strong,  sympathetic  support  to  which  they  are  entitled. 

And  as  to  you  men  who  are  in  the  industries,  large  and 
small,  it  is  of  the  utmost  importance  that  you  should  pull 
together  to  work  for  that  result,  for  whatever  there  is  in 
this  day  and  generation  that  is  hostile  to  large  business 
is  hostile  to  small  business,  and  if  the  people  are  not 
directed  in  such  a  way  as  to  lead  to  fairness  in  their  rela- 

63 


tions  with  business,  business  will  suffer  and  the  people 
will  suffer,  too. 

Now  there  are  two  or  three  things  to  which  I  would  like 
to  call  specific  attention.  The  anti-trust  laws  were  aimed 
at  what  was  an  undoubted  evil.  I  think  they  failed  to 
meet  the  evil  with  which  they  were  intended  to  deal  and 
that  they  brought  about  reactions  through  the  business 
systems  which  have  been  most  unfortunate.  It  was  an- 
other instance  where  the  dirty  army  blankets  were  thrown 
into  the  geyser,  and  it  is  possible  that  they  were  cleaned, 
but  there  were  reactions  which  were  never  suspected  and 
which  have  done  incalculable  harm.  And  as  to  small 
business,  there  has  been  legislation  in  regard  to  small 
business ;  this  legislation  which  enforces  the  fixing  of  our 
prices  and  the  legislation  which  by  means  of  the  parcel 
post  is  to  a  very  large  extent  financing  certain  types  of 
mercantile  establishments,  such  as  the  department  store, 
at  the  expense  of  the  government,  and  which  is  so  hostile 
to  the  interest  of  the  retail  store  throughout  this  country, 
is  another  instance  of  legislation  which,  well  intended,  has 
certainly  resulted  in  harm.  If  the  logic  of  development 
means  that  the  country  store  is  to  be  sacrificed  to  the  mail- 
order house,  well  and  good,  but  the  government  should 
not  have  unconsciously  got  into  a  system  where  they  were 
practically  financing  the  mail-order  business  by  a  system 
of  rebates. 

I  would  call  your  attention  to  this  one  fact,  that  we 
have  many  laws  that  are  well  intended,  that  are  aimed  at 
a  certain  specific  evil  in  business — I  am  confining  myself 
to  business  methods  now — which  when  applied  lead  to 
reactions,  lead  to  consequences  in  other  parts  of  our  com- 
plicated and  difficult  social  system  which  were  unexpected 
and  likely  to  be  most  destructive. 

It  is  the  fundamental  duty,  first,  of  the  business  men 
acting  suggestively;  second,  of  the  members  of  the  com- 
munity who  wish  well  for  the  community,  and  thirdly,  it 
is  the  duty  of  the  public  to  study  these  great  questions 
without  prejudice ;  to  see  that  your  legislators  are  prop- 
erly instructed;  that  they  approach  the  subject  in  the 

54 


same  spirit  in  which  Mr.  Wells  approached  it  in  his 
paper,  of  benefiting  the  whole  community,  because,  gentle- 
men, unless  business  is  prosperous  there  isn't  the  fund 
for  the  development  of  the  higher  things  of  life  and  there 
isn't  the  fund  produced  that  will  lead  the  gentlemen  repre- 
sented by  the  last  speaker  in  getting  what  they  want; 
that  is,  an  increased  amount  out  of  production.  They 
might  theoretically  get  an  increased  share  even  if  there 
was  not  good  business,  but  an  increased  share  of  a  smaller 
production  is  not  nearly  as  good  as  an  increased  share  of 
a  larger  production  such  as  we  ought  to  work  for  and 
for  which  we  should  all  stand  together  to  see  that  the  law 
and  the  public  sentiment  supported  business,  because  it  is 
the  industries  in  all  forms  which  are  the  root  of  all  things 
of  value  in  life. 

There  is  one  other  thing  I  want  to  say  a  word  about ;  I 
want  to  urge  that  you  gentlemen  co-operate  with  your- 
selves and  with  the  rest  of  the  community  as  a  recogni- 
tion of  the  necessity  of  supporting  the  industries  and  at 
the  same  time  of  supporting  the  underlying  fabric  of  our 
society.  We  are  on  the  verge  of  a  constitutional  conven- 
tion which  is  to  be  held  next  spring.  In  that  convention 
there  will  be  prepared  and  submitted  to  the  people  amend- 
ments to  the  Constitution  which  will  be  the  organic  law 
under  which  we  will  live  and  our  children  will  live  for 
many  hundreds  of  years  to  come.  Near  as  is  the  time 
when  you  have  got  to  go  through  the  spasm  of  an  election 
and  of  a  primary  for  the  delegates  to  that  convention,  I 
have  only  heard  of  one  organization  which  has  taken  up 
the  matter  of  endeavoring  to  prepare  the  voters  for  the 
tremendous  responsibilities  that  will  devolve  on  them 
when  they  elect  the  three  hundred  and  twenty  members  to 
represent  them.  Every  thought  and  every  shade  of  opin- 
ion of  everybody  in  this  Commonwealth  ought  to  be  repre- 
sented, and  I  hope  that  they  will  be  represented.  But 
there  is  nobody  thinking  about  this  great  subject,  and  I 
urge  this  association,  and  I  urge  the  constituent  associa- 
tions and  the  individual  men  in  those  associations  to  sup- 
port the  industries  and  to  support  the  social  organization 

55 


under  which  we  live.  And  the  way  to  go  Into  it  is  to  have 
every  man  study  the  questions  tliat  are  coming  to  the 
front  in  that  convention ;  to,  first  of  all,  go  into  his  com- 
munity and  organize  and  pick  out  delegates  to  the  con- 
vention; men  who  are  strong,  who  are  honest,  who  are 
able,  who  are  capable,  who  are  broad-minded.  They  will 
have  to  have  opinions  and,  as  I  have  already  said,  prac- 
tically all  shades  of  opinion  will  be  represented  in  that 
convention.  But  keep  out  of  that  convention  the  man 
who  is  so  weak  that  he  is  willing  to  forfeit  his  convictions 
for  a  threat.  Keep  out  of  the  convention  that  type  whom 
you  would  not  put  in  business.  But  pick  out  the  good, 
strong  Massachusetts  man  who  will  do  his  duty;  and  with 
the  result  as  I  hope  that  at  the  end  of  that  convention  we 
may  have  a  Constitution  that  will  protect  and  promote 
our  business,  so  that  every  class  in  the  community  may 
be  better  off  in  the  affairs  of  this  life,  and  one  which  will 
be  a  safe  and  solid  organization  for  our  social  fabric, 
under  which  we  may  all  live  and  with  better  results. 

President  Whitcher :  Gentlemen,  I  know  that  I  am  carry- 
ing out  the  wishes  of  this  meeting  when  I  extend  to  the 
Governor  our  most  hearty  thanks  for  the  effort  he  has 
made  in  coming  up  here.  Unfortunately,  he  was  obliged 
to  leave  on  a  recent  train.  I  also  thank  the  others  who 
have  given  us  so  much  valuable  information. 

This  meeting  now  stands  adjourned  until  seven  o'clock, 
and  I  hope  that  you  will  all  be  here  as  promptly  as  pos- 
sible to  go  on  with  the  work. 


7.00  P.  M.  SESSION 

Chairman  Frank  W.  Whitcher :  The  Chair  wishes  to  make 
two  announcements  liefore  we  go  on  with  the  work  of  the 
evening.  One  is  that  the  special  train  will  leave  at  eleven 
o  'clock,  and  if  there  are  any  who  have  not  secured  accom- 
modations they  should  see  Mr.  Lund,  who  is  in  the  rear 
of  the  room.    You  may  arrange  for  them  now  and  the 

56 


Chair  will  wait  for  a  moment  or  so.  I  am  also  pleased  to 
amioimce  that  Dr.  Victor  S.  Clark  and  Mr.  John  F.  Tohin 
are  prepared  to  answer  questions  after  the  program  of 
the  evening.  We  have  been  obliged  to  change  the  pro- 
gram simply  for  the  convenience  of  onr  speakers,  and  yet 
I  think  we  will  have  time  to  hear  them  all  and  to  listen 
to  them  as  we  wish. 

It  happens  that  my  name  appears  to  answer  for  the 
Massachusetts  State  Board  of  Trade,  but  it  is  not  my 
intention  to  inflict  upon  you  any  special  talk,  or  to  take 
any  of  your  time,  or  much  of  any  of  your  time,  further 
than  to  say  a  few  words  in  connection  with  the  Board  of 
Trade,  and  we  will  then  go  on  with  the  speaking. 

The  Massachusetts  State  Board  of  Trade  was  organ- 
ized to  concentrate  the  power  and  usefulness  of  the 
various  associations  over  the  State  in  one  corporate  body, 
in  order  to  secure  prompt  unity  and  harmony  of  action 
in  the  particular  consideration  of  subjects  pertaining  to 
the  financial,  commercial  and  industrial  and  material 
interests  of  our  State  at  large,  as  well  as  to  assist  the 
constituent  bodies  as  far  as  possible,  in  order  to  create 
more  of  a  public  sentiment  over  the  State,  and  it  is  just 
a  few  words,  gentlemen,  on  the  question  of  public  senti- 
ment and  public  opinion  which  I  wish  to  speak  to  you 
before  going  on. 

We  have  come  to  Springfield  not  only  to  consider  the 
railroad  problem  from  every  angle,  but  to  rub  elbows  with 
the  gentlemen  here,  because  of  the  splendid  public  spirit 
evinced  in  this  section  of  the  State,  and  because  of  the 
encouragement  it  is  giving  to  both  business  and  agricul- 
ture. 

We  have  learned  how  business  has  been  oppressed  and 
penalized  by  unfair  laws,  and  as  an  illustration  of  the 
attitude  of  Congress  toward  business  interests,  when  I 
was  in  Washington  two  years  ago  to  appear  before  the 
Judiciary  Committee  I  was  told  that  if  I  represented 
a  manufacturer  or  any  large  interests  I  would  receive 
scant  attention,  and  when  I  went  before  that  committee  I 
was  asked  many  questions  pertaining  to  the  association 

57 


which  I  represented  and  upon  making  a  statement  that 
^^all  the  business  men  asked  was  to  be  let  alone/'  Judge 
Carlin  of  Virginia  replied,  ^^that  is  all  the  highwayman 
asks^ — to  be  let  alone/'  and  this  1  understood  was  the 
treatment  accorded  many  business  men  who  took  the  time 
to  go  to  Washington  to  represent  associations,  having 
representatives  all  over  the  country,  and  I  assure  you  it 
was  not  pleasant  to  have  the  requests  of  our  association 
compared  with  the  requests  of  the  highwayman. 

The  question  of  public  opinion  is  one  affecting  votes. 
It  deals  with  every  employee  in  your  business ;  employees 
in  the  grocery  store,  the  hardware  store  and  all  lines  of 
business.  You  must  get  votes  to  send  men  to  Congress 
or  your  State  Legislature  who  will  see  to  it  that  business 
has  fair  play  and  that  the  industries  and  railroads  of 
the  State,  with  all  of  the  handicaps  which  are  put  upon 
them,  are  favored  just  as  far  as  possible. 

We  have  heard  of  the  handicap  caused  by  the  necessity 
of  bringing  seventy-five  per  cent,  of  our  food  supplies  and 
raw  materials  from  other  sections  of  the  country.  We 
have  learned  of  the  higher  freight  rates  which  we  are 
obliged  to  pay.  We  have  also  heard  of  higher  prices  of 
labor  caused  in  part  by  nearly  fifty  per  cent,  higher  cost 
of  living  over  the  State,  because  of  the  necessity  of  bring- 
ing food  supplies  from  long  distances,  and  it  is  time  that 
we  began  to  educate  our  employees  by  taking  them  into 
our  confidence  and  showing  them  as  far  as  we  reasonably 
can  how  very  detrimental  to  business  interests  many  of 
the  laws  are  which  have  been  enacted. 

This  can  be  well  illustrated  by  the  statement  made  only 
a  short  time  ago  by  Mr.  Edward  N.  Hurley,  chairman  of 
the  Federal  Trade  Commission,  namely,  that  the  investi- 
gation of  that  commission  showed  that,  leaving  out  of 
consideration  the  banking,  railroad  and  public  utilities 
corporations  and  referring  only  to  those  that  have  to  do 
with  trade  and  industry,  we  find  that  there  are  about  two 
hundred  and  fifty  thousand  business  corporations  in  the 
country.  The  astonishing  thing  is  that  over  one  hundred 
thousand  of  these  report  no  net  income  whatever.     In 

58 


addition,  ninety  thousand  make  less  than  five  thousand 
dollars  a  year,  while  only  the  sixty  thousand  remaining, 
the  more  successful  ones,  make  five  thousand  dollars  a 
year  and  over. 

Is  it  not,  therefore,  time,  and  particularly  so  now,  that 
our  New  England  industries  had  the  favor  of  the  bright 
sunshine  of  an  upbuilding,  constructive  policy  of  legisla- 
tion and  that  they  be  assured  of  a  continuity  of  such  a 
policy  for  a  long  period  of  years,  instead  of  the  policy 
which  has  prevailed  for  the  past  ten  years  of  oppression 
and  penalizing,  which  tends  to  pull  down  and  destroy  the 
business  fabric,  which  has  done  so  much  by  invention  and 
discovery  of  new  improved  methods  to  give  to  the  masses 
of  the  people  of  the  world  the  comforts  and  even  luxuries 
which  only  royalty  could  afford  one  hundred  years  ago? 

It  is  only  through  co-operation  with  your  employees 
and  the  encouragement  of  business  by  people  in  every 
walk  of  life  that  the  industries  of  our  State  can  continue 
to  prosper  and  expand,  and  it  is  time  that  we  said  to  each 
other : 

Up !  Up !  from  your  slumber,  ye  men  of  New  England, 

Out  from  Old  Lethargy's  fold. 
Never  wilt  thou  become  a  back  number 

If  thou  thy  courage  and  energy  hold. 

Just  as  the  forest  warden  in  the  forest  is  alert  to 
prevent  forest  fires,  so  should  our  boards  of  trade  and 
chambers  of  commerce  constantly  be  on  the  watch  to  pre- 
vent incendiary  laws  being  enacted  to  injure  business. 
We  should  create  such  a  public  opinion  favorable  to  busi- 
ness that  the  fame  of  New  England  will  resound  from  the 
shores  of  the  Atlantic  to  the  confines  of  these  States, 
echoing  from  hill  to  hill,  from  valley  to  valley,  pene- 
trating every  nook  and  corner,  until  every  fiber  of  our 
being  vibrates  with  the  cry: 

Hurrah!  for  New  England's  industries! 

Glorious  wealth  of  brains  and  skill. 
Through  knowledge,  power  and  activities. 

Ever  at  the  front  their  place  shalh  fill. 

51) 


Gentlemen,  I  charge  you  with  the  necessity  of  spread- 
ing the  gospel  of  protection  for  our  New  England  indus- 
tries, in  order  that  they  may  be  able  to  compete  with  those 
of  the  great  States  of  New  York,  Pennsylvania,  Ohio,  In- 
diana and  Illinois,  which  are  so  much  more  favorably 
situated  regarding  both  food  supplies  and  raw  material. 

Spread  the  gospel  that  New  England  business  needs 
favorable  conditions  and  a  continuity  of  a  helpful  up- 
building policy  from  the  government,  and  if  any  man  is 
sent  to  the  Senate  or  Congress  or  our  State  Legislature 
who  attempts  to  introduce  and  put  through  legislation 
antagonistic  to  business  interests  he  should  be  indicted 
and  convicted  at  the  Bar  of  Public  Opinion  of  a  crime 
against  business  and  relegated  to  the  oblivion  of  his  home, 
never  to  receive  a  position  of  public  trust  again. 

Our  Massachusetts  State  Board  of  Trade  welcomes  to 
its  membership  all  trade  and  commercial  organizations  of 
the  State,  and  we  appeal  to  you  for  your  assistance. 
(Applause.) 

Gentlemen,  our  first  speaker  of  the  evening  is  one  who 
has  had  a  very  wide  experience  all  over  the  country;  is 
thoroughly  familiar  with  the  railroad  situation  and  every 
part  of  it.  He  is  known  in  Massachusetts  as  one  of  the 
best,  if  not  the.  best,  informed  men  in  the  country  upon 
railroad  statistics  and  information,  and  everything  per- 
taining to  that  subject,  and  I  consider  it  a  great  privilege 
to  introduce  to  you  to-night  the  president  of  the  New 
York,  New  Haven  &  Hartford  Eailroad,  Mr.  Howard 
Elliott.     (Applause.) 

Mr.  Howard  Elliott:  Mr.  President  and  gentlemen:  I 
am  afraid  that  Mr.  Whitcher's  introduction  is  too  compli- 
mentary. I  try  to  know  something  about  the  transporta- 
tion question,  but  it  is  a  very  large  one.  I  will  try  to  tell 
you  something  of  the  work,  some  of  the  conditions,  that 
we  in  the  railway  world  have  been  trying  to  confront, 
and  are  still  facing. 

The  last  serious  freight  congestion  or  lack  of  transpor- 
tation facilities  in  the  country  was  in  1906  and  1907.    I 

60 


do  not  think  it  was  quite  as  severe  as  at  the  present  time, 
although  it  was  bad  enough.  I  was  at  that  time  living  in 
St.  Paul.  There  were  very  serious  conditions  all  over  the 
country  from  Chicago  to  the  Pacific  Coast,  and  from 
Chicago  to  New  York  as  well.  Since  then  the  railways 
have  been  through  a  period,  as  all  industries  have,  of  ups 
and  downs.  Suddenly  we  came,  in  1916  and  1917,  into  a 
period  when  the  transportation  facilities  of  the  United 
States  were  inadequate  for  the  increased  population  and 
the  larger  business  of  the  country. 

The  difficulty  is  not  entirely  local.  The  complaints  are 
from  all  parts  of  the  United  States.  This  you  doubtless 
know  as  your  business  ramifies  in  so  many  directions. 

So  serious  did  the  problem  become  a  month  ago  that 
the  railways  called  a  meeting  at  Louisville  to  discuss  the 
general  situation.  The  company  that  I  represent  sent 
three  representatives  to  the  meeting  for  the  purpose  of 
presenting  to  it  the  rights  and  needs  of  New  England  and 
the  obligation  of  the  entire  country  to  realize  that  New 
England  is  a  market  for  countless  things  brought  in 
here,  and  for  countless  articles  shipped  out.  I  think  we 
did  a  little  good,  but  not  as  much  as  we  hoped  for.  As  a 
result  of  that  meeting  the  subject  was  taken  up  by  a  com- 
mittee of  presidents  of  railways  in  New  York,  of  which  I 
happened  to  be  one.  They  are  known  as  the  American 
Eailway  Association,  which  covers  the  whole  United 
States.  A  special  committee  was  then  formed  of  five 
executives  to  sit  in  Washington  with  the  Interstate  Com- 
merce Commission,  or  its  representatives,  to  see  what 
could  be  done  to  make  the  best  use  of  all  present  railway 
facilities,  and  that  committee  sits  daily  from  early  in  the 
morning  until  evening,  and  oftentimes  late  at  night, 
making  an  earnest  effort  to  better  conditions.  How  long 
that  committee  will  have  to  sit  we  do  not  know. 

One  outcome  of  the  situation  may  be  the  passage  of  a 
bill  through  Congress  to  put  the  Interstate  Commerce 
Commission  in  absolute  control,  as  to  rules  and  prices  for 
cars,  of  the  entire  freight  car  equipment  of  the  United 
States.    This  would  give  the  Commission  power  to  order 

61 


cars  in  different  directions  and  to  make  charges  for  de- 
murrage and  per  diem  and  other  features  of  detail  in  rail- 
way operations.  Whether  that  will  go  through  or  not  no 
one  knows. 

But,  as  I  say,  it  is  a  nation-wide  problem.  We  know 
and  you  know  it  is  bad  here  in  Massachusetts.  It  is  bad 
in  Pennsylvania,  in  Ohio — in  many  other  places.  In  fact, 
not  long  ago  there  was  a  convention  of  business  men  in 
Baltimore,  and  one  very  prominent  business  man  wrote 
a  letter  on  the  subject  in  which  he  spoke  of  the  breakdown 
of  the  transportation  facilities  of  the  United  States.  The 
writer  gave  as  one  reason  for  present  conditions  the 
present  situation  as  to  the  regulation  of  these  great  in- 
struments of  commerce.  The  fact  that  wages  and  many 
elements  of  cost  are  beyond  railway  control  through  State 
and  Federal  laws,  and  the  further  fact  that  the  prices  for 
which  they  sell  their  transportation  are  also  fixed  and 
controlled  by  many  laws,  both  State  and  Federal,  had 
been,  in  the  opinion  of  the  writer,  having  an  accumulative 
effect  in  preventing  the  development  of  the  railway  plant 
to  the  extent  that  it  could  not  adequately  serve  the 
country. 

Then  there  is  another  committee  of  railway  executives, 
known  as  the  Managers'  Conference  Committee,  who  are 
dealing  with  the  problems  arising  from  the  so-called 
Adamson  Bill.  They  are  trying  to  elucidate  the  law  and 
arrange  a  platform  upon  which  we  can  live  pending  the 
decision  of  the  Supreme  Court  of  the  United  States. 

I  merely  mention  those  things  not  as  an  excuse  for  the 
company  that  I  happen  to  represent,  but  to  show  that 
railway  difficulties  are  nation-wide  and  in  order  to  em- 
phasize the  importance  of  looking  at.  the  problem  in  a 
broad  and  national  way,  and  the  further  importance  of 
having  a  great  deal  of  patience  and  courage  in  handling  it. 

Now,  what  do  the  public  really  want  from  the  transf)or- 
tation  companies?  What  do  you  really  want?  Time  was 
when  the  agitation  between  the  patron  of  the  transporta- 
tion lines  and  the  managers  had  most  to  do  with  rates. 
The  transportation  companies  had,  perhaps,  a  surplus  of 


product  to  sell.  The  discussion  was,  therefore,  naturally 
about  rates,  and  it  was  not  unnatural  for  the  buyer  of 
transportation  to  work  constantly  for  the  lowest  possible 
rates.  That's  human  nature.  There  was  plenty  of  trans- 
portation, and  the  question  of  adequate  facilities  was  not 
so  important.  For  many  years  rates  was  one  of  the  chief 
topics.  Then  there  was  the  question  of  discrimination — 
discrimination  between  localities,  discrimination  between 
markets — and  that  question  still  exists  to  a  more  or  less 
extent. 

Now  both  of  these  questions  have  been  somewhat  rele- 
gated to  the  rear;  the  rate  question  particularly.  Dis- 
crimination between  individuals  is  almost  gone,  although 
there  is  still  some  discrimination  between  commodities 
and  localities. 

What  you  really  want — ^what  the  railway  executives  are 
struggling  over — is  service. 

What  New  England  wants  is  service,  so  that  we  may 
bring  in  raw  materials  and  ship  out  our  manufactured 
products. 

I  happen  to  have  interests  in  the  Far  West,  and  I  know 
the  Western  railways  are  having  a  great  deal  of  trouble 
over  inadequate  service.  The  lumber  business  is  almost 
crippled  for  lack  of  service.  With  100,000,000  population, 
a  population  bound  to  grow,  for  it  will  not  be  many  years, 
measured  in  the  economic  life  of  the  nation,  before  we 
have  150,000,000,  we  ought  to  have  fifty  per  cent,  more 
transportation  facilities  in  order  to  be  prepared  so  that 
the  railways  will  be  able  to  carry  the  business  of  this 
growing  population  not  only  in  a  time  of  peace,  but  also  in 
a  time  of  war.    We  have  got  it  to  do,  and  why  not  now? 

Just  look  at  the  situation  for  a  moment !  In  1915  there 
was  less  new  mileage  built  in  the  United  States  than  in 
any  year  since  1864 — fifty  years  ago — and  there  have 
been  only  three  years  since  1848  when  there  was  less  rail- 
way construction  than  there  was  in  1915.  The  expansion 
of  the  railway  plant  stopped,  although  everybody  knew 
that  our  country  was  growing.  And  in  that  same  year, 
1915,  the  number  of  freight  cars  built  was  the  smallest 

63 


since  1904,  except  in  1911 ;  the  passenger  cars,  the  smallest 
in  number  since  1902,  except  1908;  the  locomotives,  the 
smallest  since  1908 ;  and  the  construction  was  only  65  per 
cent,  of  the  smallest  since  1893.  Yet  in  spite  of  these 
facts  the  railways  have  done  a  great  deal. 

I  have  here  a  circular.  No  doubt  some  of  you  have 
seen  it.  It  is  issued  by  the  American  Eailway  Associa- 
tion, which  gives  the  statistics  about  car  shortage.  It 
shows  that  from  July  1,  1907,  to  July  1,  1916,  there  were 
570,298  cars  built,  which  represented  a  capital  of 
$527,000,000 — an  enormous  sum  of  money  on  which  to 
pay  interest,  and  on  which  depreciation  is  pretty  rapid. 
This  same  circular  shows  that  for  a  period  of  eight  years 
preceding  the  middle  of  August,  1916,  there  had  been  a 
continuous  net  surplusage  of  cars — cars  not  in  use — ex- 
cept for  about  one  month  in  1909,  three  months  in  1912, 
one  month  in  1913,  and  March,  1914 ;  and  then  a  shortage 
from  September  1,  1914,  on  until  this  year.  At  one  time 
there  were  414,000  cars  idle  in  the  United  States. 

I  am  simply  giving  you  these  figures  to  show  you  that 
the  railway  owner  and  railway  manager  are  confronted 
at  times  with  the  serious  problem  of  a  very  large  idle 
investment,  and  yet  who  are  now  confronted  with  insuf- 
ficient facilities. 

Now  to  make  this  great  railway  plant  adequate — ^to 
furnish  the  service  that  you  and  the  country  must  have, 
and  which  New  England  sadly  needs — a  great  deal  of 
money  is  necessary. 

It  is  claimed  that  the  general  wealth  of  the  country 
increases  from  8  to  9  per  cent,  a  year.  We  as  good  Amer- 
icans hope  that  kind  of  progress  is  going  on  and  that 
the  country  is  to  continue  to  grow,  but  it  is  obvious  that 
transportation  facilities  must  increase  in  the  same  rela- 
tive proportion ;  otherwise  all  business  is  checked. 

We  have  a  very  careful  tabulation  made  recently  in 
Washington  by  an  expert  who  was  formerly  connected 
with  a  Western  state  railway  commission.  He  figures 
that  the  country  should  spend  annually  in  order  to  make 
our  transportation  facilities  adequate  for  the  people's 

64 


use  $1,250,000,000  for  the  next  ten  years,  and  that  approx- 
imately $250,000,000  is  needed  to  pay  off  additional  obli- 
gations, or  a  total  of  $1,500,000,000  a  year  that  should  go 
into  this  great  instrument  of  commerce  and  equip  it  so 
that  it  can  adequately  serve  you  and  the  whole  country 
— a  very  large  sum  of  money. 

I  don't  believe  this  expert  has  overestimated  the  case. 
The  same  matter  was  taken  up  in  1907  after  the  serious 
congestion  at  that  time  by  a  committee  of  business  men  of 
the  Chamber  of  Commerce  of  the  State  of  New  York. 
They  made  a  very  careful  study  of  the  situation  and  made 
a  report  in  1912.  This  committee  then  thought  it  would 
take  $8,500,000,000,  or  $1,700,000,000  a  year,  to  make  the 
railway  plant  adequate.  They  were  not  very  far  wrong, 
but  the  railways  could  not  or  did  not  spend  that  much 
money.  They  did,  however,  spend  $650,000,000  a  year 
for  the  seven-year  period  ending  June,  1914,  and  I  esti- 
mate, counting  1915,  there  has  been  $5,000,000,000  of  new 
capital  put  into  the  railway  plant  of  the  country  in  the  last 
eight  years.  But  you  and  I  know  from  our  daily  expe- 
rience that  that  is  not  enough. 

I  feel  that  what  has  discouraged  the  railways  and  the 
man  with  money  is  that  after  putting  the  $4,500,000,000 
of  new  capital  into  the  giant  in  that  seven-year  period 
the  increased  return  on  the  property  was  only  $8,550,000, 
or  less  than  two-tenths  of  one  per  cent. — a  return,  of 
course,  that  frightens  the  man  with  money. 

I  think  all  must  admit  that  the  present  problem  of  the 
railways  is  a  most  serious  one.  I  know  those  of  us  who 
are  trying  to  deal  with  it,  under  very  difficult  circum- 
stances, feel  so.  It  is  a  subject  similar  to  many  others, 
much  easier  to  criticize  and  suggest  than  to  construct  and 
to  perform.  That  is  true  about  any  business.  I  think  it 
is  very  necessary  for  public  opinion,  of  which  your  Chair- 
man spoke  so  well,  to  crystallize,  if  possble,  along  broad 
and  constructive  national  lines,  and  to  avoid  forming 
judgments  based  on  half  truths  or  some  misconceptions 
of  the  real  facts  of  the  situation. 

There  certainly  are,  I  think,  misconceptions  in  the  pub- 

65 


lie  mind,  altbougli  I  believe  the  feeling  is  clarifying  some- 
what. There  have  been  a  few  great  fortunes  made  in 
the  railway  business.  You  can  count  the  names  of  the 
gentlemen  who  have  made  these  fortunes  on  your  two 
Jiands  practically.  There  have  not  been  as  many  great 
fortunes  made  in  the  railway  business  as  in  lumber  or 
steel  or  banking,  or  as  in  many  other  lines  of  business. 
Then,  too,  there  has  been  a  feeling  in  the  public  mind  that 
these  great  instruments  of  commerce  are  owned  by  a  few 
individuals — controlled  by  a  few  individuals — and  that 
the  profits  finally  all  go  to  a  few  individuals.  I  think  that 
misconception  has  had  a  most  serious  effect  in  delaying 
the  time  when  we  will  be  able  to  solve  the  broad  general 
question  of  how  to  treat  the  American  railways. 

Very  likely  you  have  heard  the  figures,  but  I  want  to 
emphasize  to  you  that  the  railways  of  to-day  are  not 
owned  or  controlled  by  a  handful  of  our  citizens.  There 
are  at  least  600,000  individual  railway  stockholders. 
There  are  probably  an  additional  600,000  holders  of  bonds 
and  notes  and  evidences  of  debt;  there  are  30,000,000 
holders  of  insurance  policies,  and  part  of  the  security  back 
of  those  policies  is  $1,500,000,000  of  railway  securities; 
there  are  11,000,000  depositors  in  savings  banks,  and  part 
of  the  securities  back  of  their  deposits  are  American  rail- 
way securities.  Thus  all  these  people  are  naturally  in- 
terested either  as  indirect  or  direct  owners  of  railway 
securities.  And  there  is  no  small  clique  which  controls 
the  railways.  The  interest  in  their  ownership,  as  I  have 
pointed  out,  is  widely  distributed.  In  addition  to  the 
owners,  there  are  about  1,800,000  employees,  and  another 
1,000,000  who  depend  upon  the  purchasing  power  of  the 
railways. 

It  is  therefore  apparent  that  when  the  railways  do  not 
succeed  just  a  few  rich  people  are  not  hurt,  but  a  lot  of 
people  of  very  modest  means  are  hurt,  and  you,  and 
people  like  you,  who  must  have  adequate  service  for  your 
welfare  are  hurt. 

As  I  say,  I  have  sometimes  thought  that  the  misconcep- 
tion in  regard  to  railway  ownership  has  been  one  of  the 

GG 


things  that  has  delayed  a  final  heart-to-heart  discussion 
of  this  great  subject  on  a  true  basis.  There  is  another 
thing  that  has  delayed  it.  There  has  been,  and  I  think 
there  may  be  some  to-day,  a  distrust  of  railways  and  of 
railway  management  and  of  railway  managers  and  direc- 
tors. That  grew  up  in  part  because  some  railway  man- 
agements, some  directors,  did  things  in  the  past  that  were 
not  right ;  but  it  is  a  mistake  to-day  to  condemn  the  rail- 
ways and  managers  because  in  the  past  some  have  been 
bad,  just  as  it  is  a  mistake  to  condemn  all  physicians 
because  some  doctors  have  been  bad;  or  clergymen,  or 
editors,  or  lawyers  or  business  men.  Whatever  may  have 
been  the  conduct  of  railway  directors  in  the  past,  I  believe 
to-day  that  railway  executives  and  managers  and  railway 
directors  have  as  high  a  sense  of  public  duty,  as  great  a 
desire  to  do  their  duty  as  citizens,  as  great  a  desire  to  be 
faithful  to  the  trust  imposed  upon  them  as  any  class  of 
business  men  in  the  United  States.  They  are  keenly  alive 
to  their  responsibilities,  to  the  difficulties  that  confront 
them,  and  I  think  they  are  greatly  disturbed  because  of 
their  inability  to  produce  those  things  that  are  necessary 
for  the  country's  welfare  and  what  the  country  wants 
them  to  produce,  and  I  believe  a  body  like  this  can  do 
much  to  help  straighten  out  the  feeling  over  these  mat- 
ters. If  you  really  believe  what  I  say  is  true — that  the 
railway  men  as  a  rule  are  as  good  as  any  other  class  of 
men — it  is  your  duty  to  lend  a  helping  hand  in  this  direc- 
tion. 

Five  or  six  years  ago  there  was  formed  the  Kailway 
Executives'  Advisory  Committee,  a  body  of  railway  men 
who  have  been  devoting  the  best  brain  talent  to  the  rail- 
way problem.  We  have  been  studying  it  in  the  hope  that 
we  could  suggest  to  the  public  and  Congress  and  the  Pres- 
ident some  idea  that  would  help  to  put  and  keep  this  great 
transportation  machine  in  a  better  condition.  That  com- 
mittee is  national  in  character.  You  may  be  interested 
in  its  personnel.  Mr.  Frank  Trumbull,  who  is  chairman 
of  the  board  of  the  Chesapeake  &  Ohio,  is  chairman  of  the 
committee ;  Mr.  B.  F.  Bush  of  the  Missouri  Pacific  is  on 

67 


the  committee  representing  the  Southwest;  myself,  now 
representing  part  of  the  East ;  Mr.  W.  J.  Harahan  of  the 
Seaboard  Air  Line,  who  represents  south  of  the  Ohio 
Eiver;  Mr.  Eobert  S.  Lovett  of  the  Union  Pacific  repre- 
sents all  of  the  country  from  Omaha  to  Portland  and 
Seattle ;  Mr.  C.  H.  Markham  of  the  Illinois  Central  down 
to  New  Orleans ;  Mr.  A.  H.  Smith  of  the  New  York  Cen- 
tral system,  Mr.  F.  D.  Underwood  of  the  Erie,  Mr.  H. 
Walters  of  the  Atlantic  Coast  Line,  Mr.  Daniel  Willard 
of  the  Baltimore  &  Ohio,  Mr.  Walker  D.  Hines  of  the 
Atchison,  Topeka  &  Santa  Fe;  Mr.  Samuel  Kea  of  the 
Pennsylvania,  Mr.  L.  F.  Loree  of  the  Delaware  &  Hudson, 
Mr.  Hale  Holden  of  the  Chicago,  Burlington  &  Quincy, 
and  Mr.  A.  J.  Earling  of  the  Chicago,  Milwaukee  &  St. 
Paul. 

That  committee  has  done  a  great  deal  of  work  in  the 
last  three  or  four  years  in  an  effort  to  find  some  solu- 
tion, if  possible,  of  the  general  situation,  or  to  make  sug- 
gestions that  would  lead  to  a  solution.  Nearly  all  realize 
the  situation  is  serious.  President  Eoosevelt  spoke  about 
it  in  one  or  two  of  his  messages.  President  Taft  did  in 
one  or  two  of  his  and  President  Wilson  did  in  his  message 
of  December  7,  1915.  As  President  Wilson's  is  the  latest 
utterance,  I  will  take  the  liberty  of  reading  it  to  you : 

'  ^  In  the  meantime  may  I  make  this  suggestion  ?  The 
transportation  problem  is  an  exceedingly  serious 
and  pressing  one  in  this  country.  There  has  from 
time  to  time  of  late  been  reason  to  fear  that  our  rail- 
ways would  not  much  longer  be  able  to  cope  with  it 
successfully,  as  at  present  equipped  and  co-ordinated. 
I  suggest  that  it  would  be  wise  to  provide  for  a  com- 
mission of  inquiry  to  ascertain  by  a  thorough  canvass 
of  the  whole  question  whether  our  laws  as  at  present 
framed  and  administered  are  as  serviceable  as  they 
might  be  in  the  solution  of  the  problem.  It  is  ob- 
viously a  problem  that  lies  at  the  very  foundation  of 
our  efficiency  as  a  people.  Such  an  inquiry  ought  to 
draw  out  every  circumstance  and  opinion  worth  con- 

68 


sideling,  and  we  need  to  know  all  sides  of  the  matter 
if  we  mean  to  do  anything  in  the  field  of  Federal  leg- 
islation. No  one,  I  am  sure,  would  wish  to  take  any 
backward  step.  The  regulation  of  the  railways  of 
the  country  by  Federal  commission  has  had  admir- 
able results  and  has  fully  justified  the  hopes  and  ex- 
pectations of  those  by  whom  the  policy  of  regulation 
was  originally  proposed.  The  question  is  not  what 
should  we  undo.  It  is  whether  there  is  anything  else 
we  can  do  that  would  supply  us  with  effective  means, 
in  the  very  process  of  regulation,  for  bettering  the 
conditions  under  which  the  railways  are  operated  and 
for  making  them  more  useful  servants  of  the  country 
as  a  whole.  It  seems  to  me  that  it  might  be  the  part 
of  wisdom,  therefore,  before  further  legislation  in 
this  field  is  attempted,  to  look  at  the  whole  problem  of 
co-ordination  and  efficiency  in  the  full  light  of  a  fresh 
assessment  of  circumstances  and  opinion  as' a  guide 
to  dealing  with  the  several  parts  of  it. ' ' 

Now  whatever  our  political  faith  may  be,  it  seems  to 
me  that  business  men  and  all  should  get  behind  the  Presi- 
dent of  the  United  States  and  help  him  in  any  constructive 
work,  or  constructive  plan,  that  he  may  have  that  will  help 
to  put  this  great  transportation  business  on  a  better  basis. 
In  the  same  spirit  we  ought  to  get  behind  him  for  any 
reasonable  plan  for  the  reasonable  regulation  of  the  men 
who  work  on  the  great  transportation  systems. 

Now  this  committee  of  ours  has  done,  as  I  say,  a  great 
deal  of  work.  It  has  presented  some  results  of  that  work 
to  Congress,  and  Congress  has  appointed  a  special  com- 
mittee, headed  by  Senator  Newlands  to  take  up  the  whole 
subject.  The  Newlands  Committee  asked  us  to  present 
our  views,  and  we  have  done  so,  and  if  the  Newlands  Com- 
mittee is  to  continue  its  work  we  hope  to  present  them  in 
greater  detail. 

In  giving  our  views  we  did  not  present  them  at  all  with 
the  idea  that  we  are  trying  to  avoid  regulation.  The 
modern  railway  officials  feel  that  regulation  is  necessary 

69 


and  desirable,  and  we  are  not  trying  to  find  any  twilight 
zone  where  we  can  ^'duck,"  as  between  state  and  inter- 
state. We  believe  it  to  be  for  the  interest  of  the  country 
that  some  system  of  regulation  should  be  developed  that 
will  be  national  in  its  scope,  to  be  sufficiently  flexible  to 
meet  the  changing  conditions  of  business,  and  meet  them 
promptly,  and  a  regulation  that  shall  be  free  from  par- 
tisan and  political  bias,  and  furthermore,  a  regulation 
that  will  attract  the  investors  to  put  in  the  necessary  in- 
vestment of  $1,000,000,000  and  more  a  year.  The  regu- 
lation of  railways  can  no  longer  be  local,  because  the 
interests  affected  are  nation-wide.  We  have  therefore 
felt  after  two  or  three  years '  work  that  it  would  be  better 
for  the  development  of  these  instruments  of  commerce 
to  have  national  regulation  and  thus  avoid  conflict  be- 
tween state  and  nation. 

National  regulation  in  the  interest  of  all  the  people 
would  avoid  friction  and  conflict  between  the  several 
states  themselves  and  between  the  states  and  the  United 
States,  because  we  know  in  our  experience  there  have 
been  conflicts  as  to  rates;  there  have  been  conflicts  as  to 
the  use  of  cars;  conflicts  about  securing  them;  conflicts 
about  hours  of  service,  and  a  great  many  differences. 
There  have  arisen  cases  where  one  state  has  taken  action 
that  was  in  direct  discrimination  against  the  interest  of 
the  people  of  another  state.  The  American  system  of 
transportation  is  so  intricate  that  sooner  or  later  there 
must  be  national  standards  set  up  for  the  conduct  of  the 
business. 

We  also  believe  it  would  be  well  to  have  national  super- 
vision as  to  the  issuance  of  securities  and  thus  avoid  the 
possibility  of  improper  or  conflicting  issues. 

The  Department  of  Agriculture  is  spending  millions  of 
dollars.  Why?  To  encourage  the  farmer  to  produce 
more  food  so  that  you  and  I  and  all  may  be  sure  of  ade- 
quate food  supplies.  Now  a  little  encouragement  of  sim- 
ilar character  is  very  essential  to  the  good  of  the  general 
life  of  the  railways  and  the  plan  for  national  regulation. 
I  think  the  Interstate  Commerce  Commissioners  are  real- 

70 


izing  the  situation,  but  it  will  be  helped  along  if  such 
organizations  as  you  represent  would  say : 

We  want  a  broad,  constructive,  upbuilding  policy 
for  the  great  transportation  interests  of  the  United 
States,  just  as  much  as  we  want  a  broad,  constructive- 
policy  for  the  manufacturing  or  agricultural  inter- 
ests. 

In  suggesting  national  regulation  the  railways  have  not 
done  so  for  the  purpose  of  eliminating  state  commissions 
— there  is  lots  of  work  for  them  to  do.  We  all  try  to  meet 
their  views  just  as  far  as  we  can,  but  this  divided  author- 
ity is  one  of  the  very  serious  things  that  embarrasses  the 
railways  in  their  forward  progress. 

We  have  suggested  that  the  Interstate  Commerce  Com- 
mission be  relieved  and  helped.  We  believe  that  the 
Commission  should  go  on  and  take  care  of  the  very  large 
and  broad  questions  of  judicial  and  constructive  character 
and  that  a  second  commission  should  be  created  which 
should  have  the  business  of  the  supervision  of  details  and 
the  prosecution  for  the  failure  of  carriers  to  do  what  they 
should,  and  so  on — a  lot  of  work  that  does  not  really  be- 
long to  a  body  that  is  acting  as  judge  and,  to  a  certain 
extent,  a  law  maker,  too ;  and  by  such  a  subdivision  much 
prompter  results  would  be  obtained  for  you  and  everyone. 

Then  we  also  suggest  that  in  order  to  get  prompt  action 
all  over  the  country  that  there  be  regional  commissions. 
By  this  plan  regional  commissions  could  take  up  certain 
local  difficulties  and  shippers  would  not  have  to  go  to 
Washington  for  every  single  thing.  In  that  way  a  shipper 
out  in  St.  Paul  or  Houston,  Texas,  or  up  in  New  England 
would  have  a  body  that  he  could  go  to  without  going  to 
Washington.  If  that  change  should  be  made  we  feel  that 
these  six  New  England  States  should  by  all  means  have 
one  of  those  regional  commissions.  In  making  these  sug- 
gestions the  railways  are  not  trying  to  escape  supervision, 
but  are  only  asking  for  a  plan  that  will  tend  to  a  uniform 
practice  and  a  prompt  disposition  of  all  questions  of  in- 
terest. 

n 


Then  we  have  also  suggested  that  the  commissions  have 
the  power  to  make  minimum  rates,  because  it  is  absolutely 
essential  to  conserve  the  revenues  of  these  carriers  if 
they  are  to  give  you  the  service  that  you  want  and  need. 

The  reasonable  rate  is  a  very  difficult  thing  to  define. 
The  old-fashioned  dealing  of  the  railway  with  the  patron 
was  to  get  as  much  out  of  the  patron  as  possible.  In 
arriving  at  the  reasonable  rate  the  commissions  ought  to 
consider  not  only  the  cost  of  the  service,  but  the  value  of 
the  service ;  ought  to  consider  all  the  constantly  increasing 
expenses  of  maintenance  and  operation  of  the  property 
and  of  keeping  the  property  adequate  at  all  times  to  carry 
the  big  load.  The  public  should  be  vitally  interested  in 
having  the  principles  of  a  reasonable  rate  embody  those 
conditions,  because  it  is  to  your  interest  that  the  railways 
be  sustained,  so  that  they  will  have  sufficient  earning  and 
borrowing  power  to  add  to  their  facilities,  and  this  has 
not  been  the  case,  take  it  year  in  and  year  out. 

What  can  you  do  to  help?  You  have  very  wide  powers. 
You  represent  very  large  interests.  You  are  having  many 
of  the  same  troubles  that  the  railways  are  having.  Of 
course,  there  is  this  difference :  you  are  not  limited  by  law 
as  to  your  selling  price  and  profits,  while  the  railways 
are.  You  can  do  various  things  to  help.  While  the  rail- 
ways have  been  more  prosperous  in  the  last  year,  we  are 
already  coming  to  a  period  of  very  greatly  increased  ex- 
penses, and  these  expenses  have  already  begun  to  show. 
You  can  use  your  influence  to  help  get  a  better  regulatory 
system  in  the  United  States.  You  can  use  your  influence 
to  help  settle  the  great  labor  problem.  We  are  asking 
for  some  broad,  comprehensive,  national,  sane  platform 
upon  which  to  build  the  general  structure  of  the  organi- 
zation of  these  great  carriers,  supervised  in  the  broadest 
way ;  a  great  piece  of  machinery  that  will  reflect  the  will 
of  the  people  as  to  putting  rates  up  or  down,  or  making 
rules  for  service,  and  of  making  that  regulation  such  that 
the  credit  of  these  carriers  will  be  sustained  at  all  times, 
so  that  you  will  get  the  service  that  you  want. 

You  can  help  in  those  ways,  not  because  you  love  the 

72 


railways  or  the  railway  securities"  owners,  but  simply  be- 
cause it  is  to  your  own  interest  to  do  so  as  business  men. 
And  it  is  very  much  to  your  interest  here  in  New  England 
to  try  to  get  the  transportation  problem  worked  out  be- 
cause for  one  reason  and  another  New  England  railways 
are  in  a  serious  condition.  You  can  help  and  you  have  a 
large  influence  through  your  members  of  Congress  and 
others,  as  your  Secretary  has  said. 

One  encouraging  thought  is  that  the  public  interest  in 
this  railway  subject  is  growing.  People  have  come  to  the 
conclusion  that  whether  they  like  the  railways  or  not,  the 
railways  must  be  helped,  if  they  are  to  avoid  government 
ownership.  I  do  not  believe  to-day  people  want  the  rail- 
ways to  go  to  governmental  ownership.  Give  them 
enough  earnings  so  they  can  spend  the  $1,000,000,000  and 
more  a  year  in  giving  you  what  you  want. 

I  am  glad  to  have  a  chance  to  come  here  and  talk  to  you. 
Perhaps  I  have  given  you  some  information  that  may  be 
of  value  in  trying  to  make  up  your  minds  regarding  the 
problem  that  I  think  is  now  before  us;  how  to  regulate 
these  great  carriers  and  how  to  keep  them  at  all  times 
adequate  to  do  the  work  of  the  United  States.  (Ap- 
plause.) 

Chairman  Whitcher :  President  Elliott  says  that  if  there 
is  anyone  who  would  like  to  ask  any  questions  he  would 
be  pleased  to  answer  them. 

President  Elliott:   If  I  can. 

Chairman  Whitcher:  Are  there  any  questions?  I  don't 
think  we  shall  accept  that  amendment,  because  I  believe 
he  can  answer  all  questions  that  might  be  put  to  him. 

Mr.  Guyer  of  Hyannis:  I  would  like  to  ask  President 
Elliott  whether  or  not  he  thinks  that  government  owner- 
ship would  have  a  tendency  to  equalize  salaries  of  the 
various  employees  and  managers,  and  also  tend  to  pre- 
vent managers  or  manipulators  getting  more  than  their 
share  of  the  profits. 

73 


President  Elliott:  1  don't  know  whether  1  can  answer 
that,  gentlemen,  because  that  is  in  the  realms  of  conjec- 
ture. I  think  there  is  no  doubt  if  the  railroads  were 
owned  by  the  government  they  would  make  very  rigid 
rules  as  to  the  distribution  of  any  earnings.  But  my  own 
feeling  is  that  this  country  has  not  yet  come  to  a  point 
where  it  could  take  over  2,000,000  employees  with  safety 
to  the  Eepublic.  I  think  there  are  other  dangers  which 
would  flow  from  it  that  would  be  very  serious. 

Chairman  Whitcher:  Are  there  any  other  questions 
which  the  gentlemen  wish  to  ask? 

Mr.  George  C.  Morton:  I  would  like  to  ask  President 
Elliott,  if  it  is  not  asking  too  much,  whether  orders  have 
been  placed  for  new  motive  power  equipment,  cars,  and 
so  forth,  that  he  thinks  will  be  adequate  to  meet  the  in- 
creased business,  or  if  such  equipment  have  been  deliv- 
ered. 

President  Elliott:  Some  have  been  placed,  but  not  as 
many  as  we  hope  to  place.  We  have  bids  in  now  for  a 
large  amount  of  equipment,  but  the  prices  are  very,  very 
serious — more  than  double  what  they  were  two  years  ago 
— and  they  have  got  to  be  looked  up  very  carefully.  The 
plans  and  specifications  have  been  out  for  some  time  on  a 
number  of  things. 

Mr.  P.  C.  Headley,  Jr. :  I  would  like  to  know  if  President 
Elliott  would  give  us  some  suggestion  as  to  what  is  in 
sight  in  the  release  of  the  embargo  on  eastbound  freight, 
for  instance,  in  the  cotton  belt  and  the  West. 

President  Elliott :  It  is  all  in  the  hands  of  the  Interstate 
Commerce  Commission,  and  we  hope  very  much  it  is 
going  to  be  eased  up.  We  had  dispatches  to-day  that 
looked  very  hopeful.  It  is  all  a  part  and  parcel  of  this 
national  car  question  that  I  tried  to  explain  to  you.  It 
looked  a  little  better  to-day.    The  requests  that  the  com- 

74 


pany  had  for  relief  on  the  so-called  embargo  have 
dropped  down  to  a  very  small  volume — very  few  a  day — 
indicating  that  cars  are  coming  through  much  more  freely. 
We  are  trying  to  relieve  every  individual  case  that  we 
can,  but  that  general  subject  is  one  that  is  largely  now  in 
the  hands  of  this  committee  in  Washington  working  with 
the  Interstate  Commerce  Commission.  We  hope  the  em- 
bargo is  going  to  be  taken  oif. 

Mr.  P.  C.  Headley,  Jr. :  Do  I  understand  that  preference 
is  given  to  munition  plants! 

President  Elliott:  Nothing  of  that  kind.  It  all  comes 
through  in  its  proper  order. 

Chairman  Whitcher:  Are  there  any  other  questions! 

Gentlemen,  knowing  as  I  do  that  President  Elliott  has 
been  suffering  from  the  effects  of  a  cold  and  is  not  feeling 
up  to  his  usual  condition,  and  that  he  left  his  duties  to 
come  here,  it  is  a  pleasure  to  assure  President  Elliott  that 
we  appreciate  highly  the  sacrifice  he  has  made  in  coming 
here  and  giving  us  such  an  exhaustive  statement  as  he 
has  made,  and  to  thank  him  for  the  courtesy  he  has  ex- 
tended to  us  in  answering  these  questions  which  we  have 
put  to  him. 

Member  in  the  Audience :  Is  it  competent  for  this  gather- 
ing to  pass  a  constructive  motion!  I  was  thinking  w^hether 
it  was  best  to  have  some  action  in  regard  to  the  sugges- 
tions made  by  President  Elliott,  so  that  from  constituent 
bodies  represented  here  there  might  be  some  special  pres- 
sure brought  to  bear,  through  publicity  and  otherwise, 
upon  Washington.  And  if  it  is  competent  I  should  move 
that  a  committee  of  nine  be  appointed  by  the  Chair  to  see 
that  these  suggestions  be  very  carefully  considered  and 
that  their  purport  be  put  into  action. 

Chairman  Whitcher:  The  Chair  would  be  glad  to  state 
that  these  matters  were  referred  to  the  Committee  on 

76 


Resolutions,  which  will  be  heard  from  after  the  next 
speaker,  and  if  those  resolutions  are  not  complete  in  that 
resolution  the  matter  should  be  referred  to  the  committee 
for  their  attention. 

The  next  speaker  is  to  tell  us  of  the  application  of  the 
Panama  Canal  Act  relating  to  the  lake  lines,  as  affecting 
the  industries  of  Massachusetts  and  New  England,  and 
we  are  favored  in  having  the  traffic  manager  of  the  Na- 
tional Association  of  Wool  Manufacturers  of  Boston  with 
us.    I  will  introduce  to  you  Mr.  George  L.  Graham. 

Mr.  George  L.  Graham:  Mr.  President  and  gentlemen: 
You  have  heard  about  the  railroads.  I  want  to  give  you 
a  little  suggestion  of  a  period.  I  want  to  tell  you  of  some 
of  the  conditions  of  New  England;  some  of  our  advan- 
tages; some  reasons  why  we  should  hang  onto  those  ad- 
vantages. I  want  to  make  it  clear  that  I  do  not  disagree 
with  President  Elliott  in  what  he  has  said  regarding  the 
rates,  helping  to  some  extent  the  textile  manufacturers 
of  New  England,  the  backbone  of  the  industry  of  New- 
England.  They  cannot  disagree  with  the  railroads.  We 
have,  however,  certain  advantages  that  have  been  ours 
for  a  great  many  years  in  rail  and  water  transportation — 
advantages  in  service;  advantages  in  rates.  The  New 
England  manufacturers  are  too  far  from  their  source  of 
supply  to  have  those  advantages  materially  interfered 
with. 

This  question  of  rail  and  water  transportation  has  been 
under  consideration  by  the  Industrial  Conference  of  New 
England,  and  the  following  committee,  of  which  I  am  a 
member,  appointed  by  that  organization.  I  am  giving  you 
the  names  of  this  committee  so  that  you  may  recognize  the 
interests,  the  localities,  the  commodities: 

Mr.  E.  K.  Porter  of  the  Carter  Ink  Co.  of  Cam- 
bridge. 

Mr.  E.  L.  Van  Dyke  of  the  American,  Thread  Co., 
with  interests  in  Fall  Eiver,  New  Bedford,  Holyoke 
and  other  points  in  New  England. 

76 


Mr.  A.  L.  Rice,  representing  Lawrence  &  Co.,  a 
large  textile  concern. 

Mr.  W.  P.  Libbj,  representing  the  Plymouth  Cord- 
age Company  of  Plymouth,  Mass.,  and  formerly  pres- 
ident of  the  Traffic  Club  of  New  England. 

That  is  the  type  of  committee  which  has  undertaken  to 
present  some  of  their  views  to  you  on  the  question  of  rail 
and  water  transportation.  These  men  represent  various 
commodities,  sections  and  interests  in  Massachusetts  and 
New  England,  and  these  men  agree  that  there  is  no  more 
important  transportation  affecting  New  England  and 
Massachusetts  than  the  solution  of  the  problems  pre- 
sented by  the  necessity  for  rail  and  water  transportation 
and  the  application  of  the  Panama  Canal  Act  to  establish 
rail  and  water  lines. 

You,  gentlemen,  may  not  be  clear  as  to  what  we  consider 
rail  and  water  transportation.  From  a  traffic  standpoint 
it  is  through  rates,  through  routes,  through  control  of 
operating  conditions.  The  combination  of  rail  carriers 
into  large  companies  was  accomplished  under  the  law,  and 
these  combinations  generally  included  some  control  of 
water  lines  where  individual  rail  lines  had  found  bene- 
ficial water  routes  and  had  thereby  extended  their  rail 
lines,  increasing  their  tonnage. 

Now  I  hope  you  see  the  application  of  that,  both  to  the 
lake  lines  and  to  our  New  England  lake  and  water  lines. 
Industries  which  we  represent  ship  to  Boston  by  rail  and 
thence  by  boat;  to  New  Bedford  by  rail  and  thence  by 
boat ;  to  Fall  River  and  thence  by  boat. 

And,  gentlemen,  the  members  of  this  committee  believe 
that  there  is  no  other  way  to  get  our  New  England  prod- 
ucts to  New  York  except  by  rail  and  boat.  The  history  of 
the  various  lake  lines  carrying  package  freight  particu- 
larly, and  controlled  or  operated  by  rail  carriers  is  clearly 
set  forth  in  the  evidence  submitted  to  the  Interstate  Com- 
merce Commission  by  the  principal  lake  and  rail  carriers 
in  their  application  under  the  Panama  Canal  Act  for  ex- 
tension of  time  during  which  their  interest  in  and  opera- 

77 


tion  of  certain  boats  plying  on  the  Great  Lakes  might  be 
completed.  This  case  was  submitted  to  the  Commission 
on  December  17, 1914,  decided  May  17, 1915,  and  the  appli- 
cation of  certain  commercial  interests  for  a  rehearing  of 
the  case  denied  by  the  Commission  December,  1915. 
These  petitions  were  filed  in  accordance  with  the  provi- 
sion of  Section  5  of  the  Acts  to  Eegulate  Commerce, 
August  24, 1912. 

I  am  just  going  to  sketch  briefly  the  history  of  one  of 
those  lake  lines,  and  I  might  say  that  our  New  England 
rail  and  water  lines  have  approximately  the  same  history. 
This  is  an  abstract  of  evidence  presented  by  the  Pennsyl- 
vania Eailroad  in  their  brief.  Docket  No.  6381,  I.  C.  C, 
organization  of  the  Anchor  Line  in  1865,  up  to  the  year 
1900,  when,  after  operating  on  the  Great  Lakes,  its  cap- 
ital stock  was  acquired  by  lines  leased  by  the  Pennsyl- 
vania Eailroad. 

The  Anchor  Line  commenced  operations  in  1868  by 
chartering  a  few  boats  and  operating  them  between  Erie 
and  Lake  Michigan  ports.  In  1870  it  purchased  addi- 
tional boats  and  commenced  the  construction  of  other 
boats  for  use  in  both  freight  and  passenger  service,  and 
gradually  developed  this  fleet  so  that  in  1900  it  possessed 
a  fleet  of  sixteen  vessels,  three  of  which  were  engaged  in 
the  passenger  business  and  the  total  tonnage  of  which 
aggregated  33,800  tons. 

The  line  of  railroad  of  the  Philadelphia  and  Erie  Eail- 
road Company,  which  is  now  leased  to  the  Pennsylvania 
Eailroad  Company,  was  constructed  for  the  latter  com- 
pany in  1864,  and  in  conjunction  with  various  other  rail- 
roads and  the  Anchor  Line,  established  a  through  service 
between  New  York,  Philadelphia  and  Baltimore  on  the 
one  hand  and  various  points  on  the  Great  Lakes  and  west 
thereof. 

In  1881  the  Pennsylvania  lines  east  of  Pittsburgh  en- 
tered into  an  agreement  with  the  Anchor  Line  for  the 
establishment  of  a  through  route  via  Erie,  Pa.,  for 
the  movement  of  rail  and  lake  traffic  east  and  west- 
bound, the  railroad  company  agreeing  to  furnish  a  cer- 

78 


tain  number  of  package  freight  and  grain  eastbound  from 
Brie. 

The  Pennsylvania  Eailroad  purchased  in  1900  the  cap- 
ital stock  of  the  Western  New  York  and  Pennsylvania 
Railroad  Company  and  the  Northern  Central  Railway 
Company  purchased  the  capital  stock  of  the  Erie  and 
Western  Transportation  Company.  At  that  time  the 
fleet  of  the  Anchor  Line  consisted  of  sixteen  vessels  with 
a  tonnage  of  33,800  tons. 

During  the  thirteen  years  of  railroad  ownership  of  the 
Anchor  Line  twelve  old  and  antiquated  boats  with  a  ton- 
nage of  21,800  tons  were  replaced  with  modern  steel  ves- 
sels, so  that  on  December  31,  1913,  the  Anchor  Line  fleet 
consisted  of  twelve  vessels  with  a  total  tonnage  of  47,700 
tons  and  operating  under  a  schedule  two  days  faster  than 
that  formerly  existing. 

Prior  to  the  decision  of  the  Interstate  Commerce  Com- 
mission under  the  Panama  Canal  Act  of  May  17,  1915, 
there  were  a  great  many  vessels  in  operation  on  the  Great 
Lakes. 

These  lines  were  controlled  or  managed  by  railroads, 
and  they  were  acquired  by  railroads,  so  far  as  we  can 
learn,  legally.  The  Interstate  Commerce  Commission's 
interpretation  of  that  act  has  destroyed  a  great  deal  of 
that  beneficial  service,  which  interpretation  the  Commis- 
sion felt  it  was  warranted  in  giving,  and  I  want  to  call 
your  attention  a  little  later  to  the  fact  that  the  Commis- 
sion has  now  thrown  a  ray  of  light  on  the  situation,  and 
that  is  one  reason  why  we  are  here  to-night  to  ask  you 
gentlemen  to  look  for  that  ray  of  light ;  to  open  the  door 
for  the  textile  interests  of  New  England. 

I  will  not  read  this  list  of  names  of  lines  which  is  avail- 
able to  your  committees,  if  they  would  like  to  look  at  it, 
but  they  gave  us  over  the  Great  Lakes  a  wonderful  trans- 
portation instrumentality,  which  we  do  not  have  at  the 
present  time.  These  lines  were  very  generally  open  to 
New  England  manufacturers,  and  the  service  referred  to 
above  was  maintained  and  constantly  augmented. 

That  is  the  same  condition  with  the  Sound  lines.    The 

79 


service  each  year  has  been  maintained.  We  testified  be- 
fore the  Interstate  Commerce  Commission  in  Boston  that 
we  were  satisfied  with  the  operation  of  that  line  because 
it  had  better  control  over  its  own  operating  conditions. 
The  railroad  train  rims  down  to  New  Bedford  or  Fall 
Eiver  or  Providence  and  runs  onto  the  wharf,  where  you 
can  throw  the  cargo  from  the  boat  onto  the  wharf,  and  the 
railroad  has  made  a  schedule  so  as  to  have  the  boat  in 
New  York  and  unloaded  by  seven  o'clock  the  next 
morning. 

Another  question  is  the  question  of  differential  rates. 
The  all-rail  rate  from  Boston  rate  points  to  New  England 
generally  and  Chicago  and  Duluth,  first-class  basis,  is 
78.8  cents  per  hundred  pounds.  The  standard  rail-and- 
lake  rate,  first-class  basis,  is  62  cents  per  hundred  pounds, 
a  saving  in  lake  rail  transportation  on  first-class  goods 
of  16.8  cents  per  hundred  pounds,  or  approximately  23 
per  cent.  This  saving  runs  through  all  class  and  com- 
modity rates.  The  sixth-class  rate  on  all  rail  being  26.3 
cents  is  standard  line  and  21  cents  for  the  standard  rail 
and  lake  lines,  a  saving  of  5.3  cents  per  hundred 
pounds  on  the  Boston- Chicago  rate  basis.  The  first-class 
rate,  for  example,  from  Boston  to  Duluth,  Minn.,  via  the 
all-rail  routes  is  118.8  cents  per  hundred  pounds.  The 
standard  lake-and-rail  rate,  first-class  basis,  Boston  to 
Duluth,  Minn.,  is  62  cents  per  hundred  pounds,  or  an 
advantage  of  56.8  cents  per  hundred  pounds,  which  the 
New  England  manufacturer  has  enjoyed  for  a  great  many 
years.  That  56.8  cents  is  more  than  the  rate  from  Boston 
to  Buffalo,  and  we  enjoyed  that  advantage  because  of  this 
natural  waterway.  On  our  business  going  West  we  have 
the  same  advantage  in  rates  and  service ;  of  the  New  York 
service  via  our  rail  and  water  connections  out  of  New 
England  through  the  Sound  lines. 

The  sixth-class  all-rail  rate  from  Boston  to  Duluth, 
Minn.,  is  39.3  cents  per  hundred  pounds.  The  sixth-class 
standard  lake-and-rail  rate  for  the  same  transportation 
is  21  cents,  an  advantage  of  18.3  cents  per  hundred 
pounds.    On  the  first-class  rate  from  Boston  to  Duluth, 

80 


Minn.,  the  all-rail  route  is  118.8  cents  per  hundred  pounds, 
the  standard  lake-and-rail  rate,  Boston  to  St.  Paul,  Minn., 
83  cents  per  hundred  pounds  first-class,  or  an  advantage 
of  35.8  cents  per  hundred  pounds. 

These  rates  quoted  have  an  advantage  also,  because 
they  apply  to  shipments  destined  to  points  beyond  Duluth 
and  Superior,  in  Minnesota,  North  Dakota,  Montana  and 
beyond,  where  the  rates  are  based  on  Duluth. 

With  regard  to  the  eastbound  rate  situation,  most  of 
the  traffic  moving  eastbound  is  moved  under  commodity 
rates,  and  while  the  difference  in  some  cases  would  not  be 
as  great  in  the  aggregate,  the  advantage  of  shipments 
moving  via  the  lakes  eastbound  as  well  as  westbound  is 
decidedly  in  favor  of  the  lake  routes. 

In  dealing  with  the  question  of  the  effect  of  the  lake 
routes  on  New  England  industries,  the  first  and  most  im- 
portant thing  to  be  taken  into  consideration  is  the  fact 
that  the  success  of  any  manufacturing  district  is  largely 
dependent  upon  the  cheapness  of  the  cost  of  transporta- 
tion of  raw  materials  used  in  such  manufacture. 

To  enable  the  manufacturer  to  take  advantage  of  cheap 
transportation,  such  transportation  must  of  necessity  be 
of  such  a  nature  that  he  can  afford  to  take  advantage  of 
it ;  that  is,  it  must  be  adequate  in  all  respects  to  meet  the 
demands  of  the  volume  of  traffic  involved ;  it  must  be  per- 
fected to  such  an  extent  as  will  provide  for  good  and  reg- 
ular service.  Without  these  essentials  it  would  not  mat 
ter  much  as  to  how  cheap  the  transportation  was,  as  the 
manufacturer  could  not  afford  to  use  it. 

The  Lake  lines  in  the  past  have  provided  the  manufac- 
turers of  New  England  this  character  of  cheap  transpor- 
tation. They  having  provided  ample  capacity  to  care  for 
the  entire  volume  of  traffic  moving  at  all  times  during  the 
season  of  lake  navigation.  The  equipment  used  by  them 
in  this  service  has  been  modern  up  to  the  fullest  extent  of 
the  word.  Their  officials  and  employees  operating  and 
handling  the  lines  have  been  especially  trained  as  regards 
this  particular  feature  of  transportation,  with  the  conse- 
quent result  of  giving  to  the  New  England  manufacturers 

81 


the  benefit  of  a  most  Mghly  perfected  character  of  trans- 
portation at  the  very  lowest  possible  maximum  cost.  This 
feature  alone  demonstrates  the  great  value  of  the  Lake 
transportation  afforded  the  New  England  industries  in 
the  past. 

In  1902  there  were  seventy-five  package  freight  vessels 
operating  between  the  lower  lake  ports  and  Lake  Michi- 
gan and  Lake  Superior  ports,  not  including  Canadian  lake 
lines,  with  a  total  carrying  capacity  for  package  freight 
for  those  seventy-five  vessels  of  197,000  tons  per  trip,  and 
in  1912  the  number  of  vessels  employed  in  this  same  trade 
was  sixty-five,  with  a  carrying  capacity  of  236,000  tons  of 
package  freight  per  trip,  or  an  increase  per  trip  of  39,000 
tons  capacity. 

Li  New  England  we  make  the  package  freight  on  Lake 
lines  carry  a  lot  of  ore  bulk,  and  their  facilities  in  that 
respect  may  not  have  been  impaired,  but  our  package 
freight  business  from  New  England  is  what  I  am  speak- 
ing of  in  these  boats  having  a  capacity  of  236,000  tons  of 
package  freight. 

We  are  creditably  informed  that  during  the  season  of 
Lake  navigation  for  the  year  1917  there  will  be  no  regular 
dependable  package  freight  carriers  in  the  lake  transpor- 
tation from  Eastern  lake  ports  to  Lake  Michigan  ports 
like  Chicago  and  Milwaukee,  with  the  possible  exception 
of  one  Canadian  line  and  possibly  one  American  line. 

I  have  explained  to  you  that  these  lake  and  rail  lines 
carry  differential  rates.  There  are  three  sorts  of  rates 
known  to  a  traffic  man:  all-rail  transportation,  which  is 
the  most  expensive ;  rail-and-water  transportation,  which 
is  a  combination  of  rail  transportation  and  of  water  trans- 
portation; and  all- water  transportation,  which  is,  of 
course,  the  cheapest.  The  rail  and  lake  and  Sound  lines 
have  given  that  intermediate  rate,  and  with  a  one  hundred 
per  cent,  efficiency  service.  We  wonder  that  they  were 
able  to  do  businesB  as  long  as  they  did  as  cheaply  as  they 
did.  We  do  not  know  how  they  can  carry  goods  from 
Boston  to  Duluth  for  sixty-two  cents.  New  England 
doesn't  want  to  lose  the  advantage  of  that  spread  of  rates. 

82 


It  may  be  necessary  to  raise  that  sixty-two  cent  rate,  but 
there  is  a  decided  advantage  to  the  New  England  manu- 
facturer in  the  cheapness  that  comes  with  rail-and-water 
transportation.  We  fear  that  that  service  in  1917  will 
be  taken  away  from  us. 

Now  we  have  that  same  differential  rate  basis  from 
New  England  through  another  channel.  The  fact  that  the 
rate  is  established  on  the  Great  Lakes  gives  the  Baltimore 
and  Ohio  Eailroad  opportunity  to  establish  a  differential 
rate  basis  from  the  city  of  Baltimore  and  Norfolk,  Va. 
We  get  via  that  route  through  the  ports  of  Boston  and 
Providence  the  same  differential  rate  basis  that  we  get 
over  the  Great  Lakes.  The  Baltimore  and  Ohio  Eailroad 
had  to  have  our  New  England  tonnage  when  they  started 
railroading  in  1831.  There  was  not  tonnage  enough  orig- 
inating in  Baltimore  to  operate  the  seventy-two  miles  of 
road  they  were  operating  at  that  time  and  they  had  to 
reach  out  in  order  to  get  more  business.  They  came  to 
New  England  and  said,  **We  will  equalize  the  rates.''  In 
fact,  the  Baltimore  and  Ohio  Eailroad  has  always  been 
the  great  rate  equalizer  because  of  their  natural  disad- 
vantages. It  is  not  until  recent  years  that  the  city  of 
Baltimore  has  been  able  to  get  a  sufficient  amount  of 
tonnage.  When  the  lakes  close  up  in  winter  the  Balti- 
more rates  go  up. 

The  trade  boards  of  Milwaukee,  Kansas  City,  Mo. ;  St. 
Louis,  Mo.,  and  other  cities  have  recently  passed  resolu- 
tions expressing  the  necessity  to  those  communities  of  the 
continuation  of  this  rail-and-lake  service  and  this  differ- 
ential lake  basis.  The  Interstate  Commerce  Commission 
in  its  last  annual  report  issued  December  1, 1916,  had  indi- 
cated on  pages  63,  64  and  65  the  possible  benefit  which 
may  come  from  these  combinations,  and  suggested  that 
certain  facts  quoted  should  be  brought  to  the  attention 
of  Congress. 

I  want  to  quote  only  one  paragraph  from  that  report, 
because  that  paragraph  contains  the  essence  of  what  you 
gentlemen  may  be  able  to  do  for  the  New  England  manu- 

83 


facturers,  and  I  think  as  well  for  the  New  England  rail- 
roads.   This  is  the  quotation : 

**We  think  that  these  facts  should  be  brought  to 
the  attention  of  the  Congress,  so  that  in  the  light  of 
those  facts  it  may  determine  whether  or  not  authority 
shall  be  conferred  upon  the  Commission  to  permit,  in 
such  cases  and  under  such  circumstances,  a  continu- 
ance of  the  railroad  ownership,  control  or  operation 
of  the  water  lines,  subject  to  such  further  and  dif- 
ferent orders  as  the  Commission  may  subsequently 
enter  upon  a  further  hearing  and  a  showing  of  sub- 
stantially changed  circumstances  and  conditions/' 

I  am  very  pleased  to  offer  these  few  remarks  to  you, 
and  I  trust  that  I  may  leave  with  you  the  thought  that  we 
need  in  New  England  more  transportation,  as  President 
Elliott  has  said.    We- must  not  lose  what  we  have. 

Chairman  Whitcher:  Mr.  Graham  says  that  he  will  be 
glad  to  answer  any  questions. 

Captain  White :  I  would  like  to  ask  the  speaker  if  there 
have  been  other  advantages  in  the  rail-and-water  route 
in  regard  to  the  expeditious  handling  of  freight.  That  is 
of  even  more  value  than  the  difference  of  route. 

Mr.  Graham:  I  would  like  to  answer  that  question.  As 
I  said,  the  Sound  lines — I  testified  under  oath  that  the 
Sound  lines  gave  us  one  hundred  per  cent,  service.  They 
gave  us  good  service  until  last  year,  when  they  were 
changed  by  order  of  the  Commission  acting  under  the 
authority  of  the  Panama  Canal  Act.  Prior  to  the  season 
of  lake  navigation  they  gave  very  excellent  service.  Our 
Sound  lines  have  always  given  the  New  England  manu- 
facturers excellent  service. 

Mr.  Wing  of  Boston:  I  think  I  can  state  that  so  far  as 
wool  is  concerned  that  business  from  Duluth  to  Buffalo 

84 


has  proved  more  expeditious  than  the  all-rail  route,  and 
that  the  best  time  on  wool  shipments  has  either  been  by 
the  Merchants  &  Miners  or  by  the  Lake  lines.  That  is  to 
say,  up  to  the  time  the  Commission  divorced  the  Mer- 
chants &  Miners  from  the  New  Haven  control.  In  fact, 
so  far  as  the  wool  trade  is  concerned,  it  has  been  under 
embargo  all  the  last  season,  and  so  far  as  eastbound  wool 
is  concerned,  we  had  no  rate  eastbound  via  Chicago.  In 
other  words,  we  lost  that  differential  over  all  that  middle 
territory  from  Montana  as  far  as  St.  Louis. 

Chairman  Whitcher:  Mr.  Graham  occupies  the  position 
of  traffic  manager  of  the  American  Woolen  Company,  so  I 
think  we  may  easily  see  that  he  speaks  from  experience. 

The  chairman  of  the  Committee  on  Credentials,  Mr. 
Frank  D.  Howard  of  Chicopee,  gentlemen. 

Mr.  Howard:  It  hardly  seems  necessary  at  a  gathering 
of  this  kind  for  a  committee  on  credentials,  except  that  it 
is  of  interest  to  the  body  to  know  that  in  one  hundred 
and  fifty  cards  that  were  signed,  people  representing 
forty-six  cities  and  towns  are  here  representing  business 
men's  organizations,  boards  of  trade  and  chambers  of 
commerce,  and  the  territory  represented  is  all  the  way 
from  Cape  Cod  on  the  east  to  the  Berkshires  on  the  west. 

Chairman  Whitcher:  I  think  we  may  congratulate  our- 
selves that  so  many  gentlemen  from  all  over  the  State 
give  of  their  time  to  come  here  to  discuss  this  very  vital 
subject,  and  I  know  that  the  members  of  our  board  of 
trade  appreciate  very  much  their  doing  so. 

I  would  ask  the  chairman  on  the  Committee  of  Eesolu- 
tions  if  it  is  ready  to  report. 

Mr.  Corcoran :  If  I  may  suggest,  I  think  it  must  be  pleas- 
ing to  the  members  of  the  various  boards  of  trade,  and 
likewise  I  would  congratulate  the  State  Board  of  Trade 
upon  the  fact  that  we  have  read  in  the  morning's  paper 
that  the  War  Department  has  referred  to  Congress  the 

85 


widening  and  deepening  of  the  Merrimac  River  as  far  as 
Lowell,  at  a  cost  of  $7,000,000,  and  recommended  that  the 
work  be  finished  within  four  years.  As  you  know,  the 
State  Board  of  Trade  sent  a  committee  to  help  forward 
that  project,  and  we  hope  that  it  will  be  but  a  short  time 
when  we  can  congratulate  Springfield  in  opening  up  the 
Connecticut  River. 

Preamble  and  resolutions  favor  Federal  regulation 
of  railway  rates,  interstate  and  intrastate  Federal 
control  of  railway  securities  issues.  Proposed  rail- 
way strikes  or  lockouts  should  be  subject  to  investi- 
gation by  the  Interstate  Commerce  Commission. 

The  New  Haven  should  retain  control  of  its  boat 
lines. 

Favor  increase  of  Interstate  Commerce  Commis- 
sion membership  to  nine. 

The  Massachusetts  State  Board  of  Trade,  com- 
prising fifty-three  commercial  bodies  representing  a 
membership  of  15,000  substantial  business  men,  in 
convention  assembled  at  Springfield,  December  28, 
1916,  preamble  the  Congress  and  the  President  of 
the  United  States  as  follows : 

Within  the  past  few  years  the  banking  laws  of  the 
country  have  been  thoroughly  remodeled  and  a  cen- 
tral agency  established  whereby  the  merchandizing 
of  credit  has  been  put  upon  a  sound  economic  basis 
and  the  incongruities  of  the  past  done  away  with. 

Not  so  with  the  railways.  They  are  subject  to 
forty-nine  masters — the  Federal  government  and 
forty-eight  individual  State  governments. 

Despite  the  fact  that  the  railway  business  has 
grown  essentially  national  in  scope,  railway  regula- 
tion has  remained  local  in  character.  It  is  true  that  the 
government,  through  the  Interstate  Commerce  Com- 
mission, controls  the  railways  insofar  as  interstate 
traffic  is  concerned,  and  that  State  regulative  com- 
missions assume  control  merely  of  intrastate  busi- 
ness.    But  the  distinction  between  the  two — inter- 

86 


state  and  intrastate — has  become  more  artificial  than 
real,  and  serious  conflicts  have  become  more  and  more 
frequent. 

Probably  the  most  serious  charge  to  be  made 
against  the  dual  system  of  regulation  as  employed 
in  the  United  States  is  its  inefficiency.  It  is  unneces- 
sarily costly,  both  to  the  government  and  the  rail- 
ways, and  consequently  to  the  people.  Conflicting 
regulations  and  laws  are  passed  by  the  various  States 
through  which  the  railways  run,  and  it  is  often  diffi- 
cult, and  sometimes  impossible,  for  a  railway  to  obey 
the  law  of  one  State  without  conflicting  with  the  regu- 
lations of  another.  A  prodigious  waste  of  energy 
has  resulted,  and  a  corresponding  loss  of  power  to 
serve  the  public. 

The  railways  and  the  public  suffer  from  present 
conditions.  Railway  development  has  come  to  a 
standstill  practically.  The  future  of  the  country,  and 
particularly  during  the  next  fiw  years,  demands  a 
more  enlightened  policy.  In  the  interest  of  New 
England,  as  well  as  in  the  interest  of  the  whole  coun- 
try, we  offer  the  following : 

Resolved,  By  the  Massachusetts  State  Board  of 
Trade  in  convention  assembled  in  the  city  of  Spring- 
field, December  28, 1916,  that  the  act  to  regulate  com- 
merce shall  be  so  amended  as  to  confer  upon  the  In- 
terstate Commission  final  authority  over  all  rates 
and  regulations  which  affect  interstate  commerce, 
whether  such  rates  apply  to  interstate  or  intrastate 
shipments ;  and  that  in  the  event  of  conflict  of  juris- 
diction between  the  Interstate  Commerce  Commis- 
sion and  the  Railway  Commissions  of  the  several 
States  that  the  jurisdiction  of  the  Interstate  Com- 
merce Commission  shall  be  final  and  conclusive. 

Resolved,  That  in  order  to  attract  the  necessary 
capital  and  to  provide  for  the  development  of  trans- 
portation facilities  to  meet  the  rapidly  growing  com- 
mercial needs  of  the  country,  and  to  develop  its  re- 
sources, Congress  should  enact  such  legislation  as 

87 


will  restore  the  confidence  of  the  investing  public  and 
guarantee  the  transportation  service  required  to 
meet  the  needs  of  the  public,  and  that  this  confidence 
can  only  be  secured  by  giving  to  the  Interstate  Com- 
merce Commission  final  and  conclusive  authority  in 
the  matter  of  issuance  of  all  railway  securities. 

Eesolved,  That  we  favor  an  increase  in  the  mem- 
bership of  the  Interstate  Commerce  Commission 
from  seven  to  nine  members,  as  provided  for  in  the 
bill  which  has  passed  the  House  of  Eepresentatives 
and  is  now  before  the  United  States  Senate  for  final 
passage.  The  Interstate  Commerce  Commission,  in 
a  report  just  submitted  to  Congress,  says : 

'*The  New  York,  New  Haven  &  Hartford  Eailroad 
system  is  made  up  of  various  formerly  independent 
lines  of  rail  and  water  carriers.  By  purchases  and 
consolidations  the  New  Haven  Company  has  become 
the  owner  of  various  water  lines,  operated  mainly 
between  New  England  points  and  New  York  harbor, 
which  compete  directly  with  its  rail  lines  between  the 
same  points.  There  is  no  question  as  to  the  competi- 
tion, but  the  record  is  replete  with  evidence  from 
shippers  and  representatives  of  communities  in  New 
England  to  the  effect  that  the  service  is  in  the  inter- 
est of  the  public,  is  of  advantage  to  the  convenience 
and  commerce  of  the  people,  and  if  the  present  own- 
ership and  operation  is  discontinued  there  will  be  no 
reasonably  adequate  service  to  take  its  place  and  the 
communities  will  be  deprived  of  the  benefits  of  the 
water  transportation  and  the  competing  routes,  thus 
inflicting  irreparable  injury  and  benefiting  no  one. 

We  think  that  these  facts  should  be  brought  to  the 
attention  of  the  Congress,  so  that  in  the  light  of  those 
facts  it  may  determine  whether  or  not  authority  shall 
be  conferred  upon  the  Commission  to  permit,  in  such 
cases  and  under  such  circumstances,  a  continuance  of 
the  railroad  ownership,  control  or  operation  of  the 
water  lines,  subject  to  such  further  and  different 
orders  as  the  Commission  may  subsequently  enter 

88 


upon  a  further  hearing  and  a  showing  of  substan- 
tially changed  circumstances  and  conditions,'' 

There  is  no  need  to  add  to  the  statement  of  the  In- 
terstate Commerce  Commission,  which  discloses  that 
the  sentiment  of  the  New  Englaiid  public  is  in  favor 
of  **  giving  to  the  Interstate  Commerce  Commission 
the  power  to  continue  the  present  situation  of  rail- 
road control  both  of  the  Sound  lines  and  the  Lake 
lines  as  well. ' '    Therefore,  be  it 

Eesolved,  That  the  Massachusetts  State  Board  of 
Trade  urge  the  Congress  to  pass  the  following 
amendment  to  the  fourth  paragraph  of  Section  5  (as 
amended  August  24,  1912)  of  the  Act  to  regulate 
commerce,  as  follows: 

If  the  Interstate  Commerce  Commission  shall  be  of 
the  opinion  that  any  such  existing  specified  service 
by  water  other  than  through  the  Panama  Canal  is 
being  operated  in  the  interest  of  the  public  and  i^  of 
advantage  to  the  convenience  and  commerce  of  the 
the  people,  or  that  such  extension  will  neither  ex- 
clude, prevent  nor  reduce  competition  in  the  route  by 
water  under  consideration,  the  Interstate  Commerce 
Commission  may,  by  order,  extend  the  time  during 
which  such  service  by  water  may  continue  to  be  oper- 
ated beyond  July  first,  nineteen  hundred  and  four- 
teen. 

Resolved,  That  a  copy  of  this  preamble  and  these 
resolutions  be  forwarded  to   each  member  of  the 
House  of  Eepresentatives  and  the  United  States  Sen- 
ate and  to  the  President  of  the  United  States. 
(Signed)    John  H.  Cokcoran, 

Chairman. 

Other  members  of  Committee  on  Resolutions  as 
follows : 

William  Henry  Gleason,  Winchester,  Mass. 

Representing  Associated  Industries. 
Joseph  Wing,  Brookline,  Mass. 

Representing  National  Wool  Mfgrs.  Ass'n. 

89 


George  F.  Willett,  Norwood,  Mass. 

Representing  Norwood  Board  of  Trade. 
Honorable  Frank  E.  Stacy,  Springfield,  Mass. 

Representing  Springfield  Board  of  Trade. 
F.  Alexander  Chandler,  Boston,  Mass. 

Representing  New  England  Hardware  Dealers 
Ass'n. 
George  L.  Avery,  Framingham,  Mass. 

Representing  Framingham  Board  of  Trade. 
George  C.  Morton,  Boston,  Mass. 

Representing  Paint  and  Oil  Club  of  New  Eng- 
land. 

Chairman  Whitcher :  It  is  moved  that  these  resolutions 
be  adopted. 

Mr.  Corcoran:  In  considering  this  whole  matter  your 
committee  has  been  guided  by  this  one  thought,  of  accom- 
plishing something.  If  we  reach  out  after  too  much  we 
are  apt  to  fall  short.  If  it  goes  into  effect  and  we  find 
that  these  State  commissions  do  not  act,  then  we  should 
surely  favor  regional  commissions.  But  the  thought  of 
the  committee  was  that  we  had  better  take  one  step  at  a 
time  and  progress  slowly  and  surely.  We  do  not  want  to 
take  over  from  the  State  Commission  all  authority,  for 
we  know  that  it  would  be  an  impossibility  to  get  through 
Congress  an  amendment  to  the  Constitution  for  Federal 
incorporation.  We  have  omitted  that,  but  if  it  is  the  con- 
census of  this  meeting  that  it  should  be  included  the  com- 
mittee have  no  objections. 

Chairman  Whitcher:  If  Mr.  Corcoran  has  no  objections, 
the  Chair  would  prefer  to  have  action  first  on  the  ac- 
ceptance of  the  report  of  the  committee  and  afterward 
upon  the  adoption  of  the  resolution,  and  with  your  per- 
mission, gentlemen,  as  Mr.  Corcoran  makes  that  motion, 
if  it  is  seconded. 

Mr.  Gleason:  I  rise  to  second  that,  and  to  say  that  we 
felt  that  we  wanted  to  leave  out  anything  that  might  lead 

90 


to  discussion  or  contention.  We  wanted  to  draw  a  set  of 
resolutions  that  will  include  the  opinion  of  every  man  in 
the  audience,  and  we  think  we  have  done  so. 


Chairman  Whitcher:  Are  you  ready  for  accepting  the 
report  of  the  committee?  Those  in  favor  say  *^aye." 
(Motion  carried.)  The  motion  is  carried  and  you  have 
accepted  the  report. 

Now,  upon  the  adoption  of  the  resolutions,  Mr.  Cor- 
coran made  the  motion  that  the  resolution  be  adopted.  Is 
that  motion  seconded?  (Motion  seconded.)  Shall  we 
adopt  them  as  a  whole,  or  in  any  other  form? 

Member  of  Audience :  As  a  whole. 

Chairman  Whitcher:  Are  there  any  remarks?  Are  you 
ready  for  the  question  ?  As  many  as  are  in  favor  of  adop- 
ting the  report  of  the  Eesolutions  Committee  as  read  say 
^*aye.*'  (Motion  carried.)  It  is  a  unanimous  vote  in 
favor  of  the  adoption  of  those  resolutions. 

Mr.  Corcoran :  This  work  has  only  begun,  and  I  sincerely 
hope  that  the  fifty-three  affiliated  bodies  will  take  this 
matter  up  in  their  respective  boards  of  trade.  You 
gentlemen  are  well  aware  that  the  local  board  of  trade 
has  more  effect  on  the  Congressmen  than  any  resolution 
we  might  offer,  and  we  know  we  are  sincere  in  this  matter 
and  I  sincerely  hope  that  the  Secretary  will  take  action 
and  see  if  we  of  New  England  cannot  accomplish  some- 
thing for  our  own  field.  If  we  cannot  accomplish  some- 
thing with  twelve  Senators  from  New  England  it  is  New 
England's  own  fault  and  the  fault  of  her  business  men. 


91 


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